Titan plunges 7.2% on profitability worries, analysts cut price targets

Mumbai: Shares of Titan Company plunged 7.2% Monday after fourth-quarter outcomes confirmed profitability is beneath strain. Most analysts trimmed their price targets on the inventory, however the forecasts nonetheless suggest upside of 8-22% over Monday’s closing price of ₹3,281.

Analysts mentioned rising gold prices might dent demand for Titan’s merchandise. “There is a notable and sudden rise in gold prices (+15%) over the last two months which is impacting footfalls/growth and also gross margins/mix,” mentioned Bank of America in a shopper notice. “We see gold price volatility as a key variable to monitor; as seen historically, stability/gradual gold price change bodes well for demand.”

Citi Research mentioned it expects the inventory to stay beneath strain within the close to time period amid intensified competition and softer demand.

“Aggressive store expansion by present gamers and entry of latest participant (e.g., Novel Jewels by Aditya Birla Group will make investments ₹5,000 cr) could maintain aggressive depth elevated,” mentioned Citi’s analysts in a shopper notice.

JP Morgan mentioned regardless of the share’s outperformance up to now yr and gold price-led volatility and margin considerations, which might weigh on the near-term share costs, it expects mid-high teenagers revenue growth over the medium time period.