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Disappointed with returns of gold? You should have bought the jewellery store instead

The Financial Express logo The Financial Express 22-08-2017 FE Online

The golden days of buying gold jewellery in the hope of appreciation in wealth are now long gone. In the last six months the price of standard gold of 99.5% purity has fallen 0.56% to 29,135 per 10 grams as on 18 August 2017 from Rs 29,300 per 10 grams on 20 February 2017. For those disappointed with the recent depreciation in gold, there was another option: buying the jewellery store itself for multifold returns. Surprised? Here is the truth shares of jewellery makers have risen up to 100% in last months.

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Indian stock markets are on a continuous upswing since January 2017 except the recent slump in last two weeks. The benchmark Sensex has returned about 10% to 31,524.68 as on 18 August 2017 from 20 February 2017. Here are four jewellery stocks which have more than doubled the investors' money in the in last six months.

Thangamayil Jewellery

Shares of the Tamil Nadu based jewellery maker have risen as much as 107% to Rs 383.45 from Rs 184.9 as on 20 February 2017. Thangamayil Jewellery Limited position themselves as a chain of retail jewellery stores across several districts in Tamil Nadu, a state that is said to have the largest share at 40% of India's total gold consumption according to World Gold Council. The company primarily deals with four product lines, namely gold, silver, diamonds, and platinum. Earlier last month, the company reported a sharp spike of 114.25% in the net profit to Rs 9.62 crore for the April-June quarter 2017 versus Rs 4.49 crore during the previous quarter ended June 2016.

PC Jeweller

Shares of this jewellery company have advanced 95% to Rs 372.35 from Rs 190.73 as on 20 February. PC Jeweller first started its first showroom in 2005 in New Delhi and today have a 79 showrooms across 62 cities and 18 states. PC Jeweller has announced a bonus that share issue in the ratio of 1:1 which was immediately effective from 6 July 2017. The jewellery maker has reported a 27.42% jump in the first quarter net profit to Rs 135.82 crore in the quarter ended June 2017 versus Rs 106.59 crore during the same quarter previous fiscal.

Tribhovandas Bhimji Zaveri

Shares of one of the oldest jewellery maker in India have risen 49% to Rs 103.45 from Rs 69.2 as on 20 February this year. Tribhovandas Bhimji Zaveri started its operations in 1864, in a tin shed at Zaveri Bazar in Mumbai with the vision of Late Shri Bhimji Zaveri to facilitate India the jewellery it deserved, that of uncompromising quality and craftsmanship. The company was further led by his son, Late Shri Tribhovandas Bhimji Zaveri, who worked on expanding the business by opening new showrooms. But the major turnaround came in when his grandson Late Shri Gopaldas Zaveri offered a full value gold buy-back scheme to customers. The jewellery maker has recently posted a sharp rise of 159.11% in the April-June net profit to Rs 5.83 crore versus Rs 2.25 crore during the previous quarter ended June 2016.

Rajesh Exports

Shares of Bangalore based gold manufacturing company have risen 44% to Rs 718.9 in just last six months of trading. Rajesh Exports Ltd is the largest processor of gold in the world and accounts for 35% of the gold produced globally. The company has recently posted a little rise of 0.64% in the net profit to Rs 112.18 crore in the April-June quarter as against Rs 111.47 crore during the previous quarter ended June 2016.

Vaibhav Global

Shares of Jaipur based jewellery maker have gained 23% to Rs 514.45 in the last six month of trading. Vaibhav Global Ltd was founded in 1980 and incorporated as Vaibhav Gems Ltd in 1989, functions as a fully integrated electronic retailer of jewellery and lifestyle products.

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