Titan Glitters on strong Q3 Jewellery Sales

Titan glitters on strong Q3 jewellery sales

In today’s falling markets one stock outperforming broader indices is Titan, thanks to better than expected sells in the October-December quarter and hope to do well in the last quarter of the current fiscal year.

Retail sales in jewellery were better than expected at the beginning of Q3FY20, possibly due to a good wedding season and reasonable inelasticity of wedding jewellery.

The industry witnessed satisfactory growth in the festive season and the company performed better than industry, which led to market share gains

The Jewellery division met its revised expectations for the quarter with revenue growth at 11% on the year.

Retail growth was much better at 15% on year due to a large Rs 200 crore institutional order for gold coins in the base quarter.

While Q3FY20 jewellery segment sales were in line with the revised 2HFY20 guidance, sales growth in smaller watches and eyewear were lower than expectations.

There has been a marginal spike in gold prices over the last few days; if it sustains, it would be interesting to hear management’s post results commentary of its impact on demand.

Shares of Titan climbed 3% to Rs 1,170 on the BSE on Monday in early morning deals after the company’s jewellery sales for the December quarter (Q3FY20) came in line with guidance, while others segment disappointed.

In comparison, the S&P BSE Sensex was down 1%.

In the past eight trading days, the stock had underperformed the market by falling 6%, as compared to a marginal 0.5% decline in the benchmark index till Friday.

Overall we expect the near term to be challenging for Titan but longer-term we expect the company to perform strongly in both the jewellery and lifestyle products space.

Also, the company’s Saree business is expected to do very well as this is a large unorganized market as on date and where company intends to scale up its operations significantly going ahead.

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