Shares of Tata Group jewellery maker Titian slumped in trade on Wednesday after the firm reported Q1 results below street estimates. Titan share price slumped by more than 3.80% to hit the day’s low at Rs 998.70. In the Apr-Jun period, Titan’s standalone profit came in 6.17 per cent higher on year at Rs 370.73 crore, as against an ET Now poll of Rs 398 crore profit for the quarter. Notably, ace investor Rakesh Jhunjhunwala, who has said that Titan is his favourite scrip has increased his stake to 7.05% as at the end of June quarter.
The jewellery division recorded an income growth of 13.3% in Apr-Jun period to Rs 4,047 crore from Rs 3,572 crore reported for last year. Taking stock of the reported results, global brokerage firm CLSA noted that the Q1FY20 miss was already factored in after the firm had released a preview. Notably, Titan had said that the quarter saw an impact due to increase in gold prices and weak macro visibility. CLSA has a “outperform” rating on the shares with a target price of Rs 1,150. The firm has cut EPS estimates by 2%, and said that stock is likely to remain range-bound.
Bank of America Meryill Lynch noted that the structural growth drivers remain intact. While the Q1 results have been slightly below expectations, the company is likely to see a strong second half. The global firm has trimmed estimates by 2-3% to account for the near-term demand weakness. Bank of America Meryill Lynch has a target price of Rs 1,320. “Growth in the jewellery segment was adversely impacted by high gold prices, especially during the month of June 2019,” Titan said in the regulatory filing. According to Citi, it is prudent to wait and watch how growth trends move in the coming months. The firm has a target price of Rs 1,175. Citi said that it remains positive on the long-term growth prospects.
( Please consult your financial advisor before taking any investment related decision)