Lalithaa Jewellery vs TBZ: How the two jewellers compare
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Gold rose about 45% in rupee terms during the year to March 2026. For a jewellery retailer, that is a blessing. It inflates the value of every gram sitting in the showroom, which flows through as higher realisations and, on inventory bought earlier, as a gain. It also makes the same necklace considerably more expensive, which tends to make customers buy a lighter one, or wait. While most people immediately think of Titan or Kalyan Jewellers when it comes to jewellery, there are many smaller peers that have grown faster. Two companies we are going to compare today are Tribhovandas Bhimji Zaveri and the debutant Lalithaa Jewellery. Both have enjoyed the tailwinds discussed above and tripled their profits in FY26. But neither did it primarily by selling more jewellery. That fact matters more than anything else in the numbers. Let’s compare both across metrics and find out which is better. Business Overview #Lalithaa Jewellery Mart Incorporated in November 1985, Lalithaa is a South Indian jewellery retailer selling to mass and value-conscious customers. As of 31 March 2026, it ran 61 stores across 51 cities in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Puducherry, covering 650,881 square feet, with 7,059 employees. The business is deliberately asset-light: 58 of its 61 stores operate under leave-and-license arrangements. Tier-II and Tier-III cities contribute 60.25% of revenue and Tamil Nadu alone 53.98%. Gold jewellery is 92.33% of what it sells, supported by instalment schemes such as Dhana Vandhanam. It has just completed a ₹1700 crore IPO, comprising ₹1200 crore of fresh capital and ₹500 crore of offer for sale, priced at ₹190-201. Of the fresh proceeds, ₹1030 crore is earmarked for ten new stores. #Tribhovandas Bhimji Zaveri TBZ traces its origins to 1864 and a single store in Mumbai’s Zaveri Bazaar. The company was incorporated in 2007 and is run by the fifth generation of the founding family. It sells handcrafted gold, diamond, jadau and platinum jewellery, introduces eight to ten new lines a year, and has been pushing collections such as the detachable Dohra range. Where Lalithaa is a volume business in South Indian tier-two towns, TBZ is a premium heritage brand concentrated in Mumbai and western India. Lalithaa is roughly eight times larger by revenue and five times larger by profit. It is not a peer of TBZ in size but it is a different weight class that happens to sell the same metal. #Revenue Lalithaa's revenue grew 48% in FY26, while TBZ grew 22.2%. The Lalithaa number needs one piece of context. Its sales volumes grew just 0.7% against 48% revenue growth. The entire remainder is the gold price, which rose about 45% over the same period. That is not a criticism as every jeweller in India experienced the same thing, and passing a metal price through to the customer is the business model. But it does mean the FY26 top line describes the gold market rather than Lalithaa’s commercial performance, and anyone extrapolating 48% growth into FY27 is forecasting the gold price without realising it. TBZ does not disclose volumes, so the same test cannot be applied. Its 22.2% growth against a roughly 45% metal price rise implies volumes fell, which is consistent with a premium brand whose customers respond to higher prices by buying lighter pieces. #Profitability TBZ converted 6.3% of revenue into net profit in FY26. Lalithaa converted 4%. A premium Mumbai brand selling diamond and jadau work earns more per unit than a value retailer moving plain gold chains in Coimbatore, which is exactly what you would expect. Gold jewellery is 92.33% of Lalithaa’s revenue, and plain gold carries the thinnest making charges in the business. TBZ’s EBITDA margin expanded 446 basis points to 11.18% in FY26, and the momentum continued into the June quarter, where EBITDA margin reached 8.45% against 5.67% a year earlier on revenue of ₹841 crore, up 34.8%. Profit rose 56.9%. One detail in that quarter cuts against the trend. Its gross margin actually contracted 128 basis points to 14.9%, following the increase in gold customs duty from 6% to 15%. The EBITDA margin still expanded, which means the improvement came from operating costs rather than from what TBZ earns on each sale. Both companies reported profit growth of 177% in FY26. When two businesses of very different size, geography and positioning post an identical and extraordinary profit increase in the same year, the cause is almost certainly external to both. It was the gold price. #Debt Management Lalithaa has ₹1200 crore of fresh equity on its balance sheet, most of which is committed to ten new stores. Its asset-light structure, with 58 of 61 stores leased, keeps capital tied up in inventory, which for a jeweller means gold. Its contingent liabilities stood at ₹56 crore as of 31 March 2026, about 1.85% of net worth, mostly disputed GST demands. TBZ carries the working capital profile of a traditional jeweller, funded partly through gold metal loans, and recommended a dividend of ₹2.5 per share for FY26. #Financial Efficiency Lalithaa reports revenue growing at a 22.09% compound rate and EBITDA at 56.86% across FY24 to FY26. The efficiency question that matters for a jeweller, though, is inventory. Gold sitting in a showroom is expensive capital, and the faster it turns, the better the return. Lalithaa’s value positioning and instalment schemes are designed for exactly that, and its higher revenue on a smaller margin is the signature of a faster-turning model. On the other hand, TBZ’s premium inventory turns more slowly and earns more per turn. #Valuations At the upper IPO band of ₹201, Lalithaa is valued at roughly 11.1 times FY26 earnings of ₹18.04 per share. TBZ trades at close to 8 times, at a market value of about ₹16.6 bn. On the face of it, TBZ is cheaper. The complication is what sits in the denominator for both of them. Both companies’ FY26 earnings were lifted substantially by a 45% move in the gold price. If you strip that effect out, neither PE is what it appears. A more useful test than either PE would be to value both against average earnings across four or five years rather than against a year in which gold rose almost by half. On that basis the apparent discount narrows considerably for both. Which Jewellery Stock is Better? Both companies answer different questions, so the honest verdict depends on which question you are asking. Lalithaa is the growth case. It is eight times larger, has a defined and funded expansion plan for ten new stores, operates in the fastest-growing organised jewellery market in the country, and has just raised capital that TBZ has not. Institutional participation in the anchor book was substantial. The concerns are concentration, with 54% of revenue from one state and 92% from plain gold, and the fact that it has no track record as a listed company at all. TBZ is the value case, with the caveats attached. A 160-year-old brand at roughly 8 times earnings with a 74% promoter holding and improving operating margins is a genuinely interesting proposition. But it is small, it is regionally concentrated in a different way, and its June-quarter gross margin contraction shows the customs duty increase is already biting at the level of each sale. The thing both share is the more important observation. Neither company’s FY26 profit growth tells you much about how well it is run, because both got it from the same place. If gold keeps rising, both will report flattering numbers again. If it stops, the difference between a jeweller that is growing and one that is merely repricing will become visible very quickly. As always, evaluate each company’s business quality, financial performance, management execution, corporate governance, and valuation as key factors before drawing any investment conclusions. Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. This article is syndicated from Equitymaster.com
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