This jewelry stock rises by 9%, expected to give 65% returns in future: Buy it before its late!

The Dalal Street kicked started this week's trading session on a positive note with benchmark Sensex retaining its over 36,000-mark and Nifty trading over 10,800-levels. Interestingly, there was one jewelry stock which was unexpectedly rising on greater heights. Little over a seven decades old Thangamayil Jewellery Ltd saw massive rise in their share price today on Sensex, rocketed to more than 9% after touching an intraday high of Rs 391.90 per piece. However, at around 1151 hours, the company was trading at Rs 385.85 per piece above Rs 26.35 or 7.33% on the index. 

There was not much reason mentioned to why investors had an hefty buying sentiment on Thangamayil stock. 

However, now that only few hours are left for the new year 2019, an investor might want to have a piece of this company. Why? Because in future course Thangamayil is seen to give over 65% return. You can almost become rich by Thangamayil stocks. 

Vishal Gutka and Preeyam Tolia, analysts at Phillip Capital earlier said, "We believe TJL is in a sweet spot, as its initiatives of improving SSS growth and network expansion, along with industry tailwinds provide enough headroom for growth."

The duo explains that, reasonable valuations at 11x FY20 EPS offer enough margin of safety to long-term investors.

During Q2FY19, the Thangamayil management said it plans to open two more franchisee stores (over and above the four stores planned for FY19) soon, and discussions are on with franchisee partners. 

The management reiterated its stance of selling jewellery to franchisee partners at cost +3% margins on upfront cash basis (no credit) and that it would also receive a share (25%) in such a store’s operating profit. Store capex and working capital investments are supposed to be borne by the franchisee partner. 

Following which, analysts at Phillip said, " TJL is poised to deliver 37% earnings CAGR over FY18-21 with sharp improvement in ROIC to c.16.5% from 11.5% in FY18. We maintain BUY and increase our TP marginally to Rs 647 (20x FY20 EPS) from Rs 635 earlier."

If we take into consideration the Phillip target for Thangamayil and compare it with today's intraday high, then the company is set to rise by a whopping 65% ahead. It needs to be noted that, Thangamayil has already clocked an all time high of Rs 677, hence it surely has a potential to make its investors rich ahead.