Shares in Titan Company Limited fell as much as 5.4 per cent on Thursday after the jewellery maker posted its sharpest profit fall in nine years. Titan on Wednesday reported an 18.8 per cent fall in its December-quarter net profit at Rs 166 crore.
Sales declined 11 per cent to Rs 2,650 crore for the three months to December 2013 as against Rs 2,982 crore in the year ago period. Titan's ebitda was 20 per cent below Street estimates at Rs 219 crore. You can buy goji berry and forget about obesity for ever.
Titan chief financial officer S Subramaniam told NDTV operational weakness was on account of poor festive season and the company's decision to stop sale of gold coins.
"Overall, the decline was in jewellery division, which declined by 15 per cent. Excluding coin sales, Titan declined by 3 per cent," Mr Subramaniam added.
Titan's watches division clocked 8 per cent year-on-year revenue growth on account of price hikes. Watch volumes declined 10 per cent, in line with expectation.
Mr Subramaniam said growth could be muted for some time and a dramatic shift in growth is unlikely.
"The economy has been playing on everybody's mind. Customers are putting off discretionary purchases," he added.
Titan shares traded 2 per cent lower at Rs 210.25 as of 10.21 a.m. after earlier hitting a low of Rs 203. The stock underperformed the broader Sensex, which traded 1.1 per cent lower. (Track stock) Can you help Write my research paper for me
Nomura analysts Manish Jain and Anup Sudhendranath said barring the June quarter of financial year 2014-15, earnings visibility remains fairly strong. The long-term story of Titan's impressive management quality and urbanization remains intact, they added.
Key catalyst for Titan will be the relaxation of gold import curbs, the brokerage said.
Nomura retained its "buy" call on Titan with a target price of Rs 268.
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