Most brokerages count on Titan Co.’s gross sales to get well additional, aided by pent-up demand for gold and studded jewelry.
That comes after the nation’s largest branded jewelry maker noticed its revenue tumble sequentially within the quarter ended June. Its income, working revenue dropped and margin contracted through the interval.
Gross sales of its mainstay jewelry section, that accounts for 86.7% of complete income, fell by greater than half. Apart from, income from all different segments resembling watches and wearables and eyewear declined over the previous three months.
Nonetheless, the proprietor of Tanishq and Fastrack manufacturers beat the consensus estimate of analysts tracked by Bloomberg.
“Whereas we began the quarter with robust enterprise momentum, the second wave of the [Covid-19] pandemic severely disrupted it… [But] the learnings and expertise of the previous yr helped us navigate this quarter’s turbulence far more effectively,” CK Venkataraman, managing director at Titan, was quoted as saying in its outcomes launch.
Ajoy Chawla, chief govt officer (jewelry division) on the firm, in a post-earnings convention name, nevertheless, stated, “We have now seen sure pent-up demand on account of gold and studded jewelry from missed milestones (birthday and anniversaries) and seeing proof of it in June and July.”
Shares of Titan had been buying and selling 1.38% down within the early commerce on Thursday. Of the 33 analysts monitoring the corporate, 17 have a ‘purchase’ score, 10 recommend a ‘maintain’ and 6 advocate a ‘promote’, in response to Bloomberg knowledge. The typical of the 12-month consensus value goal implies a draw back of 1.1%.
Right here’s what brokerages need to say about Titan’s first-quarter efficiency…
Maintains ‘promote’, raises goal value from Rs 1,370 to Rs 1,380 apiece, nonetheless implying a draw back of 23.3%.
The corporate continues to pursue its technique to realize market share, which may entail increased promotions and buyer acquisition value as properly.
Aggressive depth within the close to time period is more likely to stay excessive.
Administration is hoping for quicker restoration in life-style segments.
Maintains ‘maintain’, hikes goal value from Rs 1,450 to Rs 1,740 apiece, nonetheless a draw back of three.3%.
Raises FY22-24 earnings estimates by 3-10% to think about stronger Q1 and administration commentary on retailer operations.
Like final yr, division misplaced gross sales associated to Akshaya Tritiya competition. However June exit was considerably higher, as restrictions had been relaxed and there was good traction on new clients.
Maintains ‘purchase’ with a goal value of Rs 2,065 apiece, implying an upside of 14.7%.
The restoration in June and July was robust.
Underlying demand stays sturdy, led by a decline in gold costs and robust wedding ceremony demand.
Maintains ‘purchase’ with a goal value of Rs 1,925 apiece, implying an upside of 6.9%.
As roughly 90% of the markets at the moment are open, the brokerage expects enchancment in gross sales progress.
Advertising actions and opening up of markets are anticipated to drive studded jewelry progress within the coming quarters.
Maintains ‘purchase’ with a goal value of Rs 2,100 apiece, an upside of 16.7%.
Titan Q1 FY22 outcomes had been above consensus estimates owing to higher-than-expected gross margin efficiency of jewelry enterprise.
Working margin for jewelry enterprise had been a lot increased than expectations because of beneficial gross sales combine and higher-than-expected working hours at retailer degree.
Elevated salience from high-margin studded jewelry (22% vs 18% in Q1 FY21), decrease contribution from low-margin gold cash section (7% vs 14% in Q1 FY21) and curtailment of advert spends led to this beat.