Titan Share price declines 4% post Q1 results: High Gold prices impact the show. Should you Buy, Sell or Hold the stock?

Stock Market Today: Titan Company Price declined more than 4% in morning trades on Monday post its Q1 results. The Q1 Results were declared on Friday post market hours.

Titan share price that opened at ₹3320.05, 4.1% lower than previous close of ₹3,462.35, further slipped lower to ₹3316 levels on the NSE on Monday

Titan's reported standalone net profit at ₹770 crore, came almost flat (marginal 1% lower) over the corresponding period last year. The revenue from operations in the first quarter however had risen close to nine per cent to Rs11,263 crore.

The increased gold prices hampered demand in its core jewelry business, which resulted in a subdued net profit growth for Titan Company

The Jewellery sales at ₹9,879 grew 8.9% year-on-year. This was much lower than 18.8% growth seen during Q4. 

Watches and wearables segment sales at ₹1,021 grew 14.7% During Q1

Analysts at Jefferies India Ltd in their post results report said that the Q1 was expectedly muted on growth and margins because of volatile gold prices, election restrictions, fewer weddings and heat waves.

Demand recovery hopes keep prospects firm

The reduction in Customs duty on gold import has meant that the gold prices dipped leading to hopes of demand recovery. Titan Share price also is up more than 5% since the Budget announcements on 23rd July.

The demand environment is healthy, and a revival in footfalls has been visible post-reduction in customs duty, said analysts at Motilal Oswal Financial Services. Titan remains aggressive in its growth outlook, driven by new store additions, attractive designs, and market share gains, they added. However, the competitive pressure is intense, and execution and demand will be critical to track feel analysts, who nevertheless reiterate their BUY rating on Titan share price with a target price of ₹4,000.

Concerns on GST hike remain key overhang

Analysts while are positive on demand getting a boost with Custom duty cut on Gold imports however remain concerned on any hikes by the Government on Goods and Service Tax (GST) on gold jewellery sales.

Analysts at Jefferies India Ltd said that while they remain positive on Titan in the long-term , however the gold import duty cut can cause short-term inventory losses. Also even though Titan's growth is better than several large-cap consumer peers, concerns on elevated competition and potential GST rate hikes keep us on the sidelines, they added. Jefferies target price for Titan Share price stands at ₹3600

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions