Gold is Shiny. This Business Model is Sharpier.

A Regional Jeweller Goes Absolutely Unhinged

In 2025, gold prices in India hit record highs. Like, genuinely bonkers highs. And Thangamayil Jewellery—a Tamil Nadu-based retail jeweller with 66 showrooms spread across South Tamil Nadu and now aggressively expanding into Chennai—did what any sensible retailer would do: they opened new stores, hired more goldsmiths, and watched as their inventory rotated faster than a ceiling fan in May.

The result? Q3 saw revenue more than double YoY (112% growth) to ₹2,406 crore. Nine new stores were opened in H1 FY26, five of them in the Chennai metro area. Same-store sales grew at double digits. And profit? Flat. Completely flat.

Here’s the problem with being a jeweller in a commodity bull market: you’re not actually growing the business. You’re just riding the wave. When gold prices go up, your per-gram revenue goes up. Your inventory turns faster. More people walk into your showroom. But your margin? Gets crushed. Because your costs are indexed to the same gold prices, and retail spread is a flat percentage that doesn’t care about absolute prices.

Thangamayil has achieved something remarkable: growing revenue 56% annually while profit grows only 21% per annum over five years. That’s not a business. That’s a metal refinery with a retail licence. And the stock is priced like it’s the next Titan.

How to Make ₹2,400 Crore and Still Be Worried

Thangamayil operates 66 retail jewellery showrooms primarily across Tamil Nadu, with recent aggressive expansion into Chennai. They source gold, silver, and diamonds; design and manufacture in-house at four production facilities; and retail through company-owned and rented showrooms. The business model is ultra-simple: buy metal, mark it up 3–5%, retail it, repeat.

The company boasts strong brand recall in Tamil Nadu, a region that accounts for 40% of India’s total gold consumption. They have in-house manufacturing capacity of 4 kg of gold per day (as of Q2 FY26). The manufacturing utilisation is ~75% per FY25 data. Gold inventory hedging is maintained at 96% — meaning they’re not taking punts on gold price moves. Smart risk management.

But here’s the rub: when gold prices spike, everybody floods the showroom. More footfalls = more sales = higher turnover. The problem is that operational overheads — showroom rent, salaries, utilities, compliance — don’t scale proportionally with gold prices. So margin compression is inevitable in bull markets.

The other issue: 75% of their revenues come from gold. Silver and diamonds are rounding errors. Non-gold segment is ₹375 crore out of ₹4,911 crore annual revenue. So if gold prices normalize, the entire business model gets repriced instantly.

Q3 FY26: The Numbers Don’t Lie (They’re Just Awkward)