Titan shares decline 5% even as analysts remain optimistic on stock after Q1 update

Citi

Brokerage firm Citi has a “neutral” rating on Titan with a price target of ₹3,800 per share.
The brokerage said Titan’s standalone domestic jewellery business, excluding bullion, reported a 17% growth, despite a relatively low base of 8% in the first quarter of the previous fiscal. Growth came from an early-double-digit like-for-like growth, when gold prices rose 30% from last year.The brokerage said Titan’s management highlighted:

• Like-for-like growth was driven entirely by ticket size growth
• Buyer growth was flat
• Coins continued to lead strongly, plain gold grew mid-teens while the studded segment grew early double digits leading to a decline in the studded ratio, which was estimated to decline 100 basis points to 150 basis points.
• Caratlane reported 38% growth.

CLSA

Brokerage firm CLSA has an “outperform” rating on the stock with a price target of ₹4,326 apiece.

It said Titan indicated consumer business growth of 20% from the previous year was below CLSA estimates of 22.8%.
Titan’s jewellery division grew 18% from the previous fiscal, with its Tanishq, Mia and Zoya (TMZ) brands growing 17% and Caratlane increasing 38% from the previous year. TMZ’s like-for-like growth was in low double-digits while for Caratlane it was healthy, CLSA said.Titan’s watches segment delivered a robust 25% growth and international business was up 49%, it added.

Overall, Titan’s sales growth was robust in context of an exceptional rise in gold prices and escalation in global geopolitical tension during the first quarter, CLSA said.

Morgan Stanley

Brokerage firm Morgan Stanley has an “overweight” rating on Titan with a target price of ₹3,876 apiece.

Morgan Stanley said the June quarter was a big miss for Titan’s jewellery segment’s growth and the buyer growth was flat.

Gold price volatility led to softening consumer purchases between and May and mid-June, the brokerage said. The studded share was lower, it added.

Of the 35 analysts that have coverage on the stock, 23 have a “buy” rating, seven have a “hold” rating and five have a “sell” rating.

Titan shares were down 4.59% at ₹3,497.9 apiece at 9.20 am on Tuesday, July 8. The stock has gained 7.57% this year, so far.

Also Read: SEBI Study: F&O curbs brings a decline in traders and the losses they made