Oct 7 (Reuters) – Shares of Titan (TITN.NS), slid on Wednesday after the Indian retailer reported slower growth in its mainstay jewellery business for the September quarter, as a shift in the festive calendar delayed purchases.
The company’s shares were down 4.3% at 4,359.80 rupees in early trade.
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Festival-related purchases that typically bolster sales were pushed to later in the year, deferring some consumer spending and softening demand toward the end of the quarter, analysts said.”We did not like the slowdown in buyer growth to mid-single digits (vs low double digits in 1Q and high single-digits in 4Q), sharp moderation in plain gold and coins, and CaratLane growth easing,” Macquarie analysts said.
The brokerage maintained a “buy” rating on the stock, with a target price of 5,600 rupees.
Analysts at HSBC Global Investment Research said while the topline growth was underwhelming, the mix was positive with gold coin sales declining and studded jewellery growing faster, which are expected to have a positive impact on the company’s margins.
HSBC Global, which holds a “buy” rating and a target price of 5,510 rupees, said that beyond near-term concerns, the structural growth in the company’s jewellery business remains strong.”The issue is more a case of circling higher base rather than any structural dent to Titan’s growth outlook in our view,” HSBC said.
Reporting by Saikeerthi in Bengaluru; Editing by Sherry Jacob-Phillips
