Shares of Titan Company slipped nearly 3% in intraday trade on Monday, in an otherwise strong broader market, even after the Tata group company reported double-digit growth in its third quarter sales. Titan share price has been falling for the last four consecutive sessions and declined as much as 5.4% during the same period. In comparison, the BSE Sensex has fallen 0.66% in the past four trading days.
Titan shares opened a tad higher at ₹2,539 against the previous closing price of ₹2,536.95 on the BSE. The share price of jewellery-to-watchmaker declined as much as 2.6% to hit an intraday low of ₹2,470.70 during the session, while the market capitalisation dropped to ₹2.19 lakh crore. In contrast, the BSE Sensex rose as much as 989 points, or 1.65%, to 60,889 levels.
Titan share price has delivered a negative return of 7% in the last one year, while it rebounded 14% in the past six months. In the last one year, the largecap stock has fallen over 5%, while it dropped 3% in a week.
The Tata Group company released its December quarter business report post market hours on Friday. The branded jewellery maker reported 12% YoY growth in its standalone business in Q3 FY23, on the back of healthy consumer demand during festive season. “The positive consumer sentiment helped all categories clock healthy double digit growths despite a high base in the same period of last year. Continuing the network expansion (net), the retail presence stands at 2,362 stores as at the end of the quarter,” Titan said in a BSE filing.
Segment wise, jewellery business, excluding bullion sales, grew 11% YoY, helped by healthy new buyer growths during the festive period, higher value purchases in the studded category, and unique new collections for the season. “The sales from the studded category moderately outpaced gold jewellery (plain) segment growth compared to the same period last year. Wedding sales grew in-line with the Division’s overall sales.”
The watches and wearables segment grew 14% YoY, led by strong traction in the wearables space. “A slew of exciting product launches in the fiscal year leading to the festive season contributed well to more than tripling sales from the wearables sub-segment in the quarter compared to the same period last year,” it added.
In eyecare business, sales from Titan Eye+ stores and trade and distribution channel saw in-line growth with the overall division. EyeCare expanded its nation-wide presence adding 36 new stores in Titan Eye+ (net) for the quarter.
Among others, fragrances & fashion accessories (F&FA) grew around 39% YoY, driven by 50% growth in Fragrances and 21% growth in fashion accessories. Dress wear segment, Taneira witnessed a growth of 150% YoY, aided by new store openings and healthy double digit growth from existing stores.
Analysts view on Q3 business update
Domestic brokerage Centrum remained bullish on the stock amid positive growth prospects. It has retained “Buy” rating with DCF-based target price ₹3,115 apiece. “We believe the continued sales momentum across business divisions would have positive impact on the organised Jewelry," it said.
Another domestic brokerage, Prabhudas Lilladher remained positive on the stock and given a DCF based target price of ₹2,875. “Watches and wearables growth has been led by 3x+ growth in wearable sales, new launches and renovation of 81 WOT stores, which augurs well for coming quarters. We believe new businesses like Wearables, Taneira (Distribution and product range led), Carat lane (50% sales growth YoY) will continue to gain traction. We estimate 18% PAT CAGR over FY23-25 and arrive at a DCF based target price of ₹2875. We remain positive, however, expect back ended returns given rich valuations of 49xFY25 EPS. Retain Accumulate," the agency said in its report.
