Shares of jewellery maker Titan Company surged on Monday morning despite the firm reporting tepid Q2 results in the latest quarter. Titan Company shares gained more than 4.2% in the morning trade on Monday to intra-day high of Rs 883.40. In the latest Jul-Sep quarter, Titan has reported its its lowest quarterly profit growth in over two years. Titan’s net profit rose 3% to Rs 314.4 crore as compared to the comparable period previous fiscal. The latest figures came in below analyst estimates, as a analyst poll by Bloomberg had estimated net profit at Rs 367 crore.
Net sales rose 26% to Rs 4,406 crore, while analysts estimated it at Rs 4,143 crore. vAfter the latest results, BNP paribas has maintained a buy call on the shares with a target price of Rs 1,042. The brokerage firm noted that the underlying jewellery demand looks promising. The firm has lowered FY 19-21 estimates by 1-2%. Deutsche Bank has raised the share price target to Rs 1,100.
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The global brokerage firm has said that the correction in gold prices is a key risk to the firm’s business model. The reversal of custom duties could lead to inventory losses. The firm has modeled 26% CAGR over FY 19-21. The virtuous cycle of market share gains are likely to continue in case of Titan.
“The company has done well across all its businesses in the second quarter, delivering 26% growth over last year. The jewellery business picked up this quarter after a soft first quarter and the watches business had one of its best quarters with an extremely healthy growth in bottom line for the first half. The eyewear business has picked up too with our investments in brand building showing results now,” Titan’s managing director Bhaskar Bhat said in a statement filed with the BSE on Friday.