Titan Company share price fell over 5 per cent to Rs 1,416.60 apiece in intraday deals on BSE on Monday. Rakesh Jhunjhunwala’s favorite Titan stock price traded in the red for the third consecutive day after the company announced its Jan-March quarter earnings. Titan Company’s margins were affected in the period under review due to reversal of salary cuts made in the first quarter of FY21, lower proportion of studded sales, and reduction in gold import duty. The stock was the top Sensex loser. Ace investor Rakesh Jhunjhunwala reduced his stake to 3.52 crore shares or 3.97 per cent, at the end of March quarter, from 3.75 crore shares or 4.23 per cent stake in Titan Company in December quarter, according to the shareholding pattern of the public shareholders.
Research and brokerage firm Motilal Oswal Financial Services has given a ‘buy’ rating to the stock with a price target of Rs 1,785 apiece, a rally of over 25 per cent. It said that unlike other discretionary peers, Titan can claw back some of this lost demand. “This is because the underlying demand remains robust, led by decline in gold prices and strong wedding demand. Despite 62 per cent on-year sales decline in the first quarter, it ended up reporting positive sales growth in FY21,” analysts said.
Titan Company reported a total income of Rs 7,169 crore in Jan-Mar quarter, including sale of gold bullion to the extent of Rs 25 crore, compared to the income of Rs 4,469 crore for the same quarter in the previous year. The growth in total income excluding bullion sale was 60 per cent. The company said that the jewellery division ran a diamond studded promotion in the quarter and that led to good recovery of the studded segment of the business. “However, the studded ratio continued to lag the previous year and with gold coins sales continuing to remain very high, margins in the Jewellery business continued to be under pressure,” Titan Company said.
Analysts at Emkay Global Financial Services have maintained a ‘buy’ rating to Titan Company stock. It believes that near-term weakness on lockdowns offers entry opportunities. “Strong earnings run rate in H2FY21 offers visibility of the likely earnings recovery in FY22 on full unlocking. We maintain FY22/23 estimates assuming a mild lockdown impact, which will likely be offset by pent-up demand,” they said. Titan Company remained Emkay Global’s preferred pick in the discretionary space, offering a faster growth outlook. The brokerage firm has pegged a price target of Rs 1,725, implying a gain of over 21 per cent.
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