MOSL: TITAN COMPANY (Buy)-Tough environment and high gold price impact quarter
Titan Company: Tough environment and high gold price impact quarter
(TTAN IN, Mkt Cap USD16.2b, CMP INR1253, TP INR1500, 20% Upside, Buy)
Titan (TTAN) has released its pre-quarterly update for 1QFY20. Key highlights:
Jewellery: Growth impacted by higher gold prices
- TTAN delivered lower-than-targeted Jewellery sales growth of ~13% YoY in 1QFY20 on account of the tough macroeconomic environment and high gold prices (particularly in June). However, the company continued capturing market share in the segment.
- Akshay Tritiya – a day considered auspicious to buy gold – sales were robust. This festival was celebrated in the initial part of the quarter. In fact, the first half of the quarter was good in terms of sales, with 19% YoY growth till 7th May’19 (as mentioned in 4QFY19 earnings call). However, gold prices increased toward the second half, which, in our view, led to demand postponement, impacting segmental growth for the quarter.
- 12 Tanishq stores were opened during the quarter, with net retail space addition of 34k sq. ft.
- Tanishq launched Swayahm collection of both plain and studded jewellery.
- Mia launched ‘Birthstone Pendant’, ‘Facets’ and ‘Florets’ collections.
Titan is engaged in the watch division where Co. manufactures and sells a variety of watches with varying price range within India and overseas; in the jewelry division where Co. works through Tanishq and Zoya. Tanishq has a range of jewelry studded with diamonds or coloured gems in 18 kt gold, 22 kt pure gold and platinum; and Zoya is a chain of luxury jewelry boutiques; in the eyewear division where Titan Eye+ retails products which showcase contemporary designs, coupled with optical exams with Sankara Nethralaya; and in the precision engineering division, Co. sells its components globally and helps build machinery.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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