Rakesh Jhunjhunwala favorite stock top Sensex loser today, Titan share price falls 2.6% on Q1 biz update

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Updated: July 07, 2021 3:20 PM

Titan Company share price fell as low as 2.6 per cent to Rs 1,717.55 apiece in intraday on BSE, after the watch-to-jewellery maker released a business update for the first quarter of FY22.

Rakesh Jhunjhunwala, TitanThe big bull had questioned why Cement stocks are valued at 30-40 times earnings, while steel stocks are valued at 5-7 times earnings.

Titan Company share price fell as low as 2.6 per cent to Rs 1,717.55 apiece in intraday on BSE, after the watch-to-jewellery maker released a business update for the first quarter of FY22. The company’s sales were hit amid the second COVID-19 wave, which led to temporary closures of stores in key states. Rakesh Jhunjhunwala’s favorite stock was top BSE Sensex loser in intraday deals. The stock hit a record high of Rs 1,800 in the last week of June. The sales recovery of Titan has been gradually improving across the businesses, along with the increase in the store operational days.

Titan Company reported revenue growth of 117 per cent (excluding bullion sales) in the Apr-Jun quarter of the current fiscal, with revenue contributions of approximately 50 per cent, 10 per cent and 40 per cent coming from April, May and June months, respectively. In the volume traded terms, 1.44 lakh shares exchanged hands on BSE, and a total of 15.56 lakh units on NSE. The government has also made the hallmarking of gold jewellery mandatory from June 15, 2021, under which jewellers will be able to sell hallmark certified 14 or 18 or 22 carats of gold jewellery.

Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala, collectively held 4.49 crore shares in Titan Company at the end of the March 2021 quarter.

In just less than a year, Titan Company share price has nearly doubled from the level of Rs 941 apiece, a year ago. “90 per cent of Titan stores have already reopened, and footfalls are higher than last year, there are few concerns over the impact of the implementation of compulsory hallmarking on Titan’s franchise versus its peers,” Tanusree Banerjee, Co-Head of Research, Equitymaster, told Financial Express Online. She added that the implementation may be phased and time-consuming for most unorganised jewellery retailers. But once done it will bring them almost at par with organised players like Titan Company. “This could impact Titan’s market share in the jewellery business. Titan’s other businesses (watches, eyewear etc) have not been able to scale up meaningfully in terms of contribution to overall revenues,” Banerjee said.

Titan Company is targeting to gain market share in the Jewellery segment due to strong focus on wedding segment, huge scope for store expansion (40-50 stores every year), and gold harvest and gold exchange schemes, said Amarjeet Maurya, AVP – Mid Caps, Angel Broking. He also said that the shift from unorganized (currently 70 per cent) to organized (currently 30 per cent) in the jewellery segment will benefit branded players like Titan due to strong brand positioning and superior quality.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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