Thangamayil Jewellery Ltd

BALARAMA GOVINDA DAS

Dear Shareholders,

I am indeed pleased to place before you thefinancial results for the year ended 31st March 2025.

We could do a ye: another record turnover of Rs.4,91,058 lakhs with an EBITDA profit of well over Rs.22,468 lakhs. The factors that contributed to this performance was majorly from the geographical expansion of your company done in the metro city of Chennai, T.Nagar and also due to significant increase in the gold price impact. Consequent to steep increase in gold price, the company in spite of opening of 5 more outlets could do a volume improvement by 4%, The existing SSS (Same Store Sates) increased by 18.1% as against 23.49% in value terms done in the previous year. However, the overall reported retail sales in value terms increased by 27%. The profit after tax was at Rs.11,871 lakhs as against Rs.12,324 lakhs achieved in the previous year. The modest decline in PAT is attributed in spite of increased top line mainly due to customs duty reduction hit taken by the company in the second quarter of 24-25 FY as reported earlier.

You may notice in spite of overall good operational performance, the company had to spent a significant amount on "Brand Promotional activity" with a view to sustaining the growth momentum gained in the earlier years in the overall Tamilnadu operations intended and rapidly penetrated currently.

As you are aware that we have hedged our inventory almost fully (at 96%) we could not get any significant inventory gains as that of any other competitors in the trade. However, we could get the full benefits on the higher revenue realization resultant on rapid increase in gold and silver price movement witnessed throughout the year but for second quarter performance.

Subject to this, all our key operating and financial performance indicators improved moderately. Our customer base, ticket size, per square feet realization, per employee saies, net worth accretion etc., also improved significantly.

It is heartening to note in spite of 5% goid price increase in the first 44 days of the current year (FY 25-26) I did not see any perceptible drop in sales. The first 44 days sales improved by 22% vs previous year. But for the steep increase in gold price caused by geo-political & trade war concerns, our initial performance is satisfactory in the current year. Further I take this opportunity to thank all our shareholders for having subscribed fully to the Rights issue of Rs.51,000 lakhs raised by the company in mid- March 2025 for geographical expansion in Chennai and its surronding areas & due to unprecedented spike in gold price. The proceeds of the Rights issue are being utilized for the purpose for which it was raised.

The company has expanded its activities to five more retail outlets and took the net tally of retail outlets to 62 and likely to complete another minimum 8 outlets in the remaining months of FY 25-26. This year "Akshaya Thirithiyai" fell on 30/04/2025 and due to unprecedented gold price spike in first month of 25-26, the company could maintain the topline sales of around Rs.15,880 lakhs, even though a steep fail in Volume by 24% was witnessed. This trend is in line with the other players in the industry as well.

Subject to normal behaviour of orderliness in the gold price movement, we are well placed to improve our performance in FY 25-26 for the following reasons:

a. Geographical expansion In the city and surrounding areas of Chennai

b. Higher customer base with the help of "Digi Gold" App with better redemption value opportunities

c. Improved SSS performance expected in all retail existing outlets due to huge spend on brand building & recall efforts, at state level by using rapid growth in viewer ship targets.

d. Lesser discounts/ rebates to customer advances portfolio due to changes made in its operations and negligible discount to "Digigold" small time customers whose base is improving.

e. Continued polarization impact on a better scale due to stricter compliances imposed by Govt agencies and also reduction in small ticket customers sales due to non-affordability.

f. Elevated gold price likely to stay around this year due to continuous geo-political reasons also will contribute to incremental revenue to the bottom line.

g. Entry in "Metro city Chennai" will improve the sales of high margin items including studded items.

In this back ground of positive factors, there remain certain areas of challenges that have to be navigated carefully by your company like.

a. Ever increase in gold price much beyond the affordability band of our customers

b. Continued requirements on spending related to publicity and brand awareness plans that is not relatable directly to results.

c. Extra ordinary shift is taking place in the customers discriminatorily spending profile.

d. Continued unhealthy competition prevailing in the market as the over all size of the market in volume terms shrinking modestly.

e. Delayed justice on the existing income-tax litigation issues at the next level affecting the liquidity situation unwittingly.

f. For some more time, our incremental capital outlay may not result in increase in bottom line due to additional resources required to sustain operations in the long run.

In this context, your management has taken the following pro-active steps to mitigate the adverse impact arising out of these challenges like;

a. Concentration on improved capital productivity by ensuring better inventory rotation.

b. Maintaining the competitive price advantage to retain and improve customer base

c. Increase in geographical expansion in an effective manner

d. Continue to optimize cost parameters as in the past

e. Fuller use of technology absorption in all areas of operational fields

f. Better financial discipline and resorting to maintain the performance and efficiency indicators.

Our financial position continues to be good. Our overall cost of funds is also under control at 4.99% on a blended manner which is comparable to any other companies in the industry. We strictly adhere to capital allocation policy as approved by the board from time to time. We continue to hedge almost fully in the uncertain time of escalation in gold price movement due to fully external factors. We have as on 14/05/25 adequate liquidity in the system inclusive of eligible undrawn bank limits upto 20,600 lacs.

As regards, geographical expansion plan, we continue to open retail outlets as per our "Rights issue plan" in and around the city of Chennai and also in 3 to 4 outlets outside Chennai in other towns. This expansion will result in maintaining our dominant player status as a powerful regional brand in the state of Tamilnadu. The funds required for the CAPEX and working capital requirements are in place namely.

As against this planned expansion for fund requirements will be in the order of Rs. 850 Crs to be spend in FY 2024-25 and FY 2025-26.

Apart from thesefunds, the estimated internal cash accruals even at the same level as in 24-25 FY operations of about Rs.184 Crs will be additionally available to the company for its planned operations in case of any cost escalations in Inventory holdings.

Your Board of Directors in their meeting held on 15/05/25, recommended for a dividend of Rs.12.50/- per share of Rs.10/- face value on the enhanced paid up share capital post Rights issue of 3.108 Crores requiring an amount of 38.85 Crores as distribution out of current year profits.

It is gratifying to note thatyour Company from incorporation completed 25 years in existence and I am happy to share that the "market cap" for the Company as on 31/03/2025 was at Rs.6,243 Crs.

Before I conclude, I would like to place on record, my heartful gratitude to all our employees. Thanks to our bankers under multiple banking system and to all our beloved shareholders, who have extended "support and trust" to the management at all points of time.

Looking forward for yet another rewarding & fruitful year 2025-26.