Covid restrictions, competitive pressures may impact Titan's growth

Margin pressures, valuations too weigh on the stock

While Titan’s revenue performance in the March quarter was robust and on expected lines, its operating performance missed street estimates. The company reported a 250-basis-point dip in operating profit margins which was lower than a flattish margin trajectory the street was working with. The decline in profitability, according to the company, was largely due to lower gross margins in the jewellery and watch segments as both segments reported a higher share of lower margin products. 

In the jewellery segment, a 70 per cent revenue growth was supported by lower prices of gold, a weak year ago base and wedding-related purchases.