Regional Jewellers Outpace Titan Amid Gold Price Surge

Two regional jewellery companies have made much bigger stock-market gains than Titan over the past five years.

TBZ, a jewellery company with roots in Mumbai dating back to 1864, is being taken over by GRT Jewellers.

Investors pushed TBZ’s share price far above the price GRT agreed to pay the family.

Thangamayil Jewellery, which operates mainly in Tamil Nadu, also saw its shares rise strongly.

However, its sales increased mostly because gold became more expensive, while jewellery volumes grew more slowly.

A rise in gold prices can make old inventory look more profitable.

But customers may buy less when gold becomes too expensive or import duties rise.

TBZ has weak cash generation compared with its profit and high borrowings.

Thangamayil has stronger recent cash generation, but its shares trade at a much higher valuation and its sales volumes have softened.