Titan slips 2% despite 11% YoY jewellery sales growth in Q3 update

In the past three months, the stock declined 9 per cent, as against 4 per cent rise in the S&P BSE Sensex.

Even as the Nifty50 went up by 1.35 per cent on Monday to close at 18,101.20, it was a mixed bag for jewellery stocks.

Shares of Titan Company dropped 1.9 per cent to close at Rs 2,489.95 on the NSE on Monday. On the other hand, shares of Kalyan Jewellers went up 3.82 per cent to Rs 125 on the NSE.

This comes after Titan’s jewellery division (excluding bullion sales) reported around 11 per cent year-on-year (YoY) growth in the December quarter (Q3 of FY23).

Healthy new buyer growths in the festive period, higher-value purchases in the studded category and unique collections for the season helped the division of Titan achieve growth during the quarter.

During the past one month, Titan has underperformed the market as shares fell 5 per cent against 2.6 per cent decline in the Sensex.

In the past three months, the stock declined 9 per cent, against a 4 per cent rise in the benchmark index.

The leading jewellery and watchmaker of the Tata Group recorded 12 per cent YoY growth in its standalone business in Q3 of FY23. This was led by healthy consumer demand, spurred by the vibrant festive season.

“The positive consumer sentiment helped all categories clock healthy double-digit growth despite a high base in the same period of last year,” Titan Company said.

The company also continued network expansion, adding 111 stores during October-December 2022. It took the total number to 2,362 stores at the end of the quarter.

Analysts at Motilal Oswal Financial Services (MOFSL) believe that the earnings growth visibility for Titan remains strong. It has compounded earnings by Rs 20 per cent for an extended period.

Meanwhile, Kalyan Jewellers recorded a consolidated revenue growth of approximately 13 per cent in the December quarter (Q3 of FY2023) compared to the same period of the previous financial year

This came as the quarter witnessed positive momentum in footfalls and revenue across all the markets, majorly driven by strong festive demand.

The stock had hit a 52-week high of Rs 134 on December 29, 2022.

The company’s year-to-date (YTD) consolidated revenue for the first nine months (April-December) of the financial year 2022-23 grew 35 per cent compared to the same period last year.

Its India operations witnessed revenue growth of around 12 per cent YoY for Q3. This was because it was the first normalised quarter after the Covid-related market dislocation.