Stock watch: Timex watches

Timex watches have been witnessing increased investor interest on the bourses. The stock ended at Rs 22.25, up 21 per cent from last week. Nearly 3 lakh shares were traded on the BSE on Tuesday, up 177 per cent from about 1.1 lakh shares last week.

There is increasing buying interest at the counter as the company looks poised for growth. The company has completed its restructuring exercise and has successfully turned around.

Thus, the company reported a net profit of Rs 0.7 crore in the 2005 fiscal, after witnessing losses for many years. The increasing proportion of the youth population and their changing perception of watches as accessories instead of just utility products, should mean sustained growth in watch sales.

Timex is the second-largest manufacturer in the organised watch market. It has a market share of 12 per cent in the 13-million pieces branded watch market. The company plans to increase its stores from the current 20 and add 120 new ones in the next 36 months and double its turnover to Rs 160 crore in the next three years.

For this, the company has decided to concentrate on the premium segment of the market and expand its brand portfolio by introducing international brands such as Opex, Nautica, Timberland, and FCUK through the licensing route.

In H1 FY06, the company has achieved sales equal to 52 per cent of the turnover recorded in the whole year of FY05. Analysts expect that though the stock is risky, it is a good turnaround story amid the company's ambitious plans and the current boom in the retail industry.