Shares of Titan Company hit a record high of Rs 1,679.60 after they rallied 6 per cent on the BSE in intra-day commerce on Thursday amid the expectation of a strong recovery, because of pent up demand and market share gains.
The inventory of Tata Group Company surpassed its preceding high of Rs 1,620.95, touched on January 6, 2021. With today’s rally, it has retrieved 20 per cent from its recent low of Rs 1,401, hit on May 4 in intra-day commerce.
With a sharp surge available in the market price of Titan Company, its market capitalisation stands near to the Rs 1.5 trillion mark. At 11:42 am, the inventory was once up 5.5 per cent at Rs 1,672, with a market capitalisation of Rs 1.48 trillion, the BSE data shows.
Titan Company manufactures and retails jewellery and watches. It also produces fragrance for women and men.
Ace investor Rakesh Jhunjhunwala (3.97 per cent stake) and his wife Rekha Jhunjhunwala (1.09 per cent) collectively held 5.06 per cent stake in Titan Company at the end of the March 2021 quarter, the shareholding sample data shows.
On April 29, Titan reported robust sales growth of 61 per cent year-on-year (YoY) in the January-March quarter (Q4FY21) but the operating performance was once below Road estimates on lower Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins (down 250 basis points) because of a steep fall in gross margin. The company attributed the margin overlook to a weak revenue mix, higher coins & B2B sales in jewellery and the affect of custom duty discount.
Analysts at Geojit Financial Services and products imagine that the company’s ongoing initiatives to contain cost, manage cash and make stronger market share (policies rolled out in a more systematic manner this time as in comparison to final year) will have to lead to better margins and fortify healthy performance.
“Unlike other discretionary peers, Titan can claw back some of this missing demand. It is because the underlying demand remains robust, led by a decline in gold prices and strong wedding jewellery demand. Despite around 62 per cent YoY sales decline in Q1, it ended up reporting positive sales growth in FY21,” analysts at Motilal Oswal Securities said in result update.
“We expect slow expansion in jewellery margins provided the focal point on growth and market share gain. Titan is going to get pleasure from growth in adjacent commerce divisions such as turnaround in eyewear commerce with around 18 per cent EBIT (earnings before interest tax) margins in 2HFY21, full recovery in watch division and scalability of Taneira,” according to analysts at Prabhudas Lilladher.
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