Titan Shares Drop Nearly 5% as CFO Says Jewellery Business Growth at Risk
Titan Co. Ltd shares dropped nearly 5% in intraday trade on Wednesday after the company’s chief financial officer (CFO) S Subramaniam warned that the FY20 growth target for jewellery business was at risk.
At 3:15pm, the Titan stock was trading at Rs 1,029, down 1.7%, after hitting an intra-day low of Rs 998. Interestingly, the stock has lost over 20% since July when the company reported a slowdown in its jewellery business in the June quarter.
Subramaniam, while discussing the company’s quarterly performance, told CNBC TV18 that the 20% growth seen for jewellery business in FY20 was at risk due to higher gold prices and import duty of 2.5%.
“We have had a very bad second half of June and that unfortunately continued in July. August is looking slightly better and September will be far better because the season starts. We had a bad July and therefore, the impact of that on the first half would be material,” said Subramaniam.
“Our target for the second year continues to be as they are and we are reasonably hopeful that we should be able to do so because our customer surveys have indicated a decent Diwali,” he added.
Titan on Tuesday registered a 6.2% jump in its standalone net profit at Rs 370.7 crore for the June quarter against Rs 349.2 crore in the same quarter a year ago. The company’s revenue rose 14.4% to Rs 4,939.7 crore during the quarter versus Rs 4,319 crore in the year-ago quarter.
The jewellery division recorded an income growth of 13.3% in the June quarter, while the watches business posted growth of 20.4%.
Talking about the watches business, Subramaniam told CNBC Tv18: “Watches did well despite consumer slowdown. We target to achieve 13-14% growth in this business.”