Titan Company dips 3% after June quarter business update

Shares of Titan Company dipped 3 per cent to Rs 1,717.55 on the BSE in intra-day trade on Wednesday after its quarterly business update of Q1FY22 highlighted that healthy growth trajectory sustained till mid-April 2021 until lockdown disrupted demand.

The company recorded revenue growth of around 117 per cent year-on-year (YoY), excluding bullion sales, in the April-June quarter of the financial year 2021-22 (Q1FY22), with revenue contribution of nearly 50 per cent, 10 per cent and 40 per cent coming from April, May and June months, respectively. The figure was, however, down 60 per cent on a quarter-on-quarter (QoQ) basis. 

“The company entered the quarter with a good sales momentum. The sales were hit only to a small extent until the third week of April, from the rapidly rising second wave of the pandemic, primarily due to the temporary store closures in some important states. Thereafter, most stores were shut within a short span of time and could re-open gradually in June only, with several restrictions on operating hours and days of the week. Sale from stores that stayed open in May was muted,” Titan Company said in a quarterly update. READ HERE

The watches and eyewear segment witnessed rapid recovery in walk-ins with the re-opening of stores, a trend that was seen in only the jewellery division last year, the company said.

“Titan was among the few discretionary companies in our coverage to have reverted back to healthy sales growth post the pandemic disruptions. We expect pent up demand, particularly for wedding jewellery, to be deferred from Q1FY22 to subsequent quarters. Currently, 90 per cent plus Tanishq stores are operational (33 per cent shut during weekends). Focus on markets share gains and maintaining balance sheet strength (RoCE: 30 per cent plus, cash & investments: Rs 3,400 crore ) positions Titan as one of the preferred picks in the discretionary category,” ICICI Securities said in an update.

At 10:17 am, the stock was down 1.8 per cent at Rs 1,732 on the BSE, as compared to a 0.03 per cent rise in the S&P BSE Sensex. A combined 1.2 million shares had changed hands on the counter on the NSE and BSE so far.