Titan Co surges over 7% ahead of March quarter nos; here's what to expect

Last month, the company, in a business update, had informed that the lockdown and restrictions imposed on various activities due to the Covid-19 pandemic had posed challenges to all its businesses.

Shares of Titan Company climbed as much as 7.46 per cent to Rs 1,065 apiece on the BSE on Monday ahead of its March quarter results due later in the day. The stock, however, retreated from its day's high levels and at 11:06 am, it was trading over 3 per cent up at Rs 1,023.60. In comparison, the S&P BSE Sensex was ruling 478 points or 1.39 per cent higher at 34,764.96 levels. 

Last month, the company, in a business update, had informed that the lockdown and restrictions imposed on various activities due to the Covid-19 pandemic had posed challenges to all the businesses of Titan Company Limited (the “Company”/“Titan”) and its subsidiaries. 

The jewellery-to-watches maker said that increase in mark-to-market cash outflow on gold hedge due to rising gold prices and committed costs being incurred also contributed to the negative cash flow. However, it expects this cash outflow to be recovered when sale of jewellery restarts. “Thus, the Covid-19 situation is expected to adversely affect the profitability during the first half of this year,” Titan had said. READ MORE

Analysts at Kotak Securities expect 13 per cent year-on-year (YoY) decline in jewellery segment revenues, lower than guidance of 11-13 per cent growth, partly due to sharp rise in gold prices during the quarter and Covid-19-led lockdown. "Our growth forecast implies about 27 per cent YoY decline in volumes and 20 per cent increase in realisations (Gold price+mix), 21 per cent YoY decline in the watches segment revenues, and 13 per cent decline in eyewear segment," the brokerage said in the earnings preview note. 

It expects the company to post a net sales (revenue) of Rs 4,068.9 crore for the period, down 12.9 per cent YoY and 34.4 per cent QoQ. EBITDA is seen at Rs 442.5 crore, down 11.8 per cent YoY and 39.8 per cent QoQ. PBT (profit before tax) is estimated at Rs 362.8 crore, down 29 per cent YoYa and 43.1 per cent QoQ while net profit is expected to come in at Rs 267.5 crore, down 9.2 per cent YoY and 43.1 per cent QoQ. 

Emkay Global Securities expects jewellery /watches / eyewear segments to record growth of -5% / 1% / -20%, respectively. It expects the company to register net sales (revenue) of Rs 4,438.5 crore during the recently concluded quarter, down 5 per cent YoY and 28.5 per cent QoQ. EBITDA margin is expected to see a decline of 176 bps YoY at 11.5 per cent. PBT is seen at Rs 425.3 crore, down 8.5 per cent YoY and 33.2 per cent QoQ. Net profit is expected to drop 16.6 per cent YoY and 32.3 per cent QoQ to Rs 318.1 crore. 

Analysts at Dolat Capital note that general consumption slowdown due to Covid-19 pandemic, postponement of weddings, and store closures is expected to restrict growth. It sees a 3.1 per cent YoY fall in the company's revenues at Rs 4,528.4 crore. PAT is expected to drop 22.3 per cent YoY to Rs 283.2 crore.