More steam left in Thangamayil?

Shares of Thangamayil Jewellery (TJL) rallied 17 per cent last week following a positive report by broking from Phillipcapital. The brokerage said the jewellery company was in a sweet spot thanks to improving same sales growth, expansion drive and – most importantly – the tailwind created by the new hallmarking regulations. “We believe the stringent implementation of hallmarking regulations (in force from June 2021) will lead to market share gains for TJL, as most mom-and-pop jewellers in Tamil Nadu are non-complaint…valuations at 10 times FY23 estimated EPS offer enough margin of safety to long-term investors. TJL is poised to deliver 20 per cent earnings CAGR over FY21-24,” said Phillipcapital in a note with a price target of ~1,000. Currently, the stock trades at ~1,097. Some analysts believe TJL can still be a good long-term bet, given the low forward valuations.