Signals, Powered By EquityPandit
Titan Company Ltd was trading higher for the second day, up 3 per cent at Rs 1,614 on the BSE in intra-day trade on Wednesday. The stock has gained 6 per cent in the past two days in an otherwise range-bound market. In comparison, the S&P BSE Sensex was up 0.27 per cent at 50,775 points, at 10:05 am.
The stock was quoting close to its record high level of Rs 1,620.95, touched on January 6, 2021. With past two day’s rally, it has recovered 15 per cent from its recent low of Rs 1,401, hit on May 4, in intra-day trade.
On April 29, Titan reported robust sales growth of 61 per cent year on year (YoY) in the January-March quarter (Q4FY21) but the operating performance was below Street estimates on lower Ebitda (earnings before interest, taxes, depreciation, and amortization) margins (down 250 basis points) due to a steep fall in gross margin. The company attributed the margin, miss, to weak revenue mix, higher coins & B2B sales in jewellery and impact of custom duty reduction.
Analysts at Emkay Global Financial Services expect near-term impact due to Covid-19 restrictions, but a strong recovery in H2FY22 indicates pent-up demand and market share gains. Besides, its initiatives to accelerate growth in the wedding segment may offset most of the loss in sales ahead. Jewelry margin performance should improve as studded sales recover on full unlocking. Turnaround of eyewear/CaratLane and exit of loss-making JVs (Mont-Blanc/Favre Leuba) should also provide potential margin upsides.
Stock Covered in the news
