The watch and jewellery manufacturer posted a 74% drop in revenue from sales on-year basis to just Rs 1,251 crore against Rs 4,885 in the same period last year.
Shares of Titan Company Ltd slipped over 4% on Tuesday morning to trade at Rs 1,057 per share after the company posted a net loss of Rs 270 crore in the April-June quarter. The sharp decline in share price may have resulted in ace investors Rakesh Jhunjhunwala losing as much as Rs 199 crore of his investment in the stock. The watch and jewellery manufacturer posted a 74% drop in revenue from sales on-year basis to just Rs 1,251 crore against Rs 4,885 in the same period last year. Rakesh Jhunjhunwala held a 4.43% stake in the company at the end of June.
Rakesh Jhunjhunwala held 3.93 crore shares of Titan at the end of June this year, according to data available on the stock exchanges. Based in this, the total value of his investment in stock at the end of trading on Monday morning stood at Rs 4,354 crore. As investors reacted to the falling revenues of the company, the share price slipped to trade at Rs 1,065 per share against Monday’s closing price of Rs 1,107 apiece. The sharp fall in stock price brought the total worth of Rakesh Jhunjhunwala’s investment in the stock to Rs 4,189 crore, erasing Rs 165 crore off his wealth. Along with Rakesh Jhunjhunwala his better half, Rekha Jhunjhunwala, too owns a significant stake in the company with 97,40,575 shares in her name.
The fall in revenue and the net loss that Titan reported in the previous quarter was largely aided by store closures. However, the company has reported better than expected recovery with sales surging in the months of June and July. During the quarter, jewellery segment revenue dipped 55.9% on-year basis and revenue from watches plunged 89.5% from the previous year.
Titan’s management said that store reopening stood at 83% at the end of June 97% to date. However, Titan said that all stores are not operating on all days in all the states due to intermittent lockdowns and local restrictions. Titan expects revenue to be back to pre-coronavirus levels by the end of this fiscal year. Brokerage and research firm Kotak Securities has a BUY rating on stock despite near-term headwinds as it expects the company to emerge stronger in the post-coronavirus world. Edelweiss Securities too is bullish on the stock pinning a target price of Rs 1,295 per share. “We remain confident of Titan’s long-term story underpinned by its robust brand portfolio, strong balance sheet and store expansion focus,” analysts at Edelweiss said. However, brokerage firm Prabhudas Lilladher has a HOLD rating on Titan, factoring in the near term headwinds.