Stock Market Today: Titan Company Price Declines After Q1 Results
Titan Company saw its stock price decline more than 4% in morning trades on Monday following the release of its Q1 results, which were announced after market hours on Friday.
Titan Share Price Performance
The Titan share price opened at ₹3320.05, 4.1% lower than the previous close of ₹3,462.35, and further dropped to ₹3316 levels on the NSE on Monday.
Q1 Results Overview
Titan reported a standalone net profit of ₹770 crore, which was almost flat (marginally 1% lower) compared to the same period last year. However, the revenue from operations in the first quarter increased by close to nine per cent to Rs11,263 crore.
Impact of Gold Prices on Business
The increase in gold prices hampered demand in Titan’s core jewelry business, leading to subdued net profit growth for the company.
The Jewellery sales at ₹9,879 grew 8.9% year-on-year, while the Watches and wearables segment sales at ₹1,021 grew 14.7% during Q1.
Demand Recovery Hopes Drive Confidence
The reduction in Customs duty on gold imports has resulted in lower gold prices, raising hopes of an increase in demand. Titan’s share price has also risen more than 5% since the Budget announcements on 23rd July.
Analysts at Motilal Oswal Financial Services noted a healthy demand environment with a revival in footfalls post-custom duty reduction. They emphasized Titan’s aggressive growth outlook through new store additions, attractive designs, and market share gains.
Concerns Over Potential GST Hike
While analysts are optimistic about the demand boost from the Custom duty cut on Gold imports, concerns linger about potential Goods and Service Tax (GST) hikes on gold jewelry sales.
Jefferies India Ltd analysts expressed positivity on Titan’s long-term prospects but cautioned about short-term inventory losses due to the gold import duty cut. Elevated competition and potential GST rate hikes are key factors keeping analysts on the sidelines, with Jefferies setting a target price for Titan share price at ₹3600.
