Titan Company’s stock was up 3% in intra-day trade on the BSE on Wednesday, putting it above Rs 1,614 for the second day in a row. In an otherwise range-bound market, the stock has risen 6% in the last two days. The S&P BSE Sensex, on the other hand, was up 0.27 percent at 50,775 points at 10:05 a.m.
The stock was trading around its all-time high of Rs 1,620.95, set on January 6, 2021. With the rise over the last two days, it has recovered 15% from its intra-day low of Rs 1,401, which it touched on May 4. Titan reported strong sales growth of 61% year over year (YoY) in the January-March quarter (Q4FY21) on April 29, but operating performance fell short of Street expectations due to reduced Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins (down 250 basis points) due to a significant drop in gross margin. The business cited the margin shortfall on a poor revenue mix, increasing coinage and B2B jewellery sales, and the impact of custom duty reductions.
According to analysts at Emkay Global Financial Services, the Covid-19 limits would have a short-term impact, but a significant rebound in H2FY22 shows pent-up demand and market share gains. Furthermore, its measures to accelerate growth in the wedding market may be able to offset the majority of the sales declines expected in the near future. As studded sales return after complete unlocking, jewellery margins should improve. Turnarounds in eyeglasses and caratlane, as well as the departure of loss-making joint ventures (Mont-Blanc/Favre Leuba), should all help to boost margins.
On complete unlocking, the strong profits run rate in H2FY21 provides clarity of the projected profits rebound in FY22. Titan remains our top discretionary selection, with a faster growth projection, according to the brokerage firm’s results report. It keeps the stock at a ‘buy’ rating with a target price of Rs 1,725 per share.
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Hello, my name is Anuj Boruah. I am quite interested in writing about current events in business, finance, and the economy. I work as a newswriter at Reviewminute.
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