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market | IST

Positive on Titan, ABFRL; see near-term competitive pressure for paint cos: Edelweiss Securities

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Edelweiss Securities is positive on Titan, said Abneesh Roy, ED-Institutional Equities. He also mentioned that festive demand looks good for Aditya Birla Fashion. He is seeing strong consumption trends for Godrej Consumer Products as well as Marico.

Abneesh Roy, ED-Institutional Equities, Edelweiss Securities, shared his views on some of the popular names what with festive season having begun with a bang.
He said, “The house remains positive on Titan and expects market share gain for the stock. Moreover, people are keen on spending on jewellery. The gold prices have also come off and Titan continues to launch digital gold and is much more focused on marriage jewellery, therefore still positive on it.”
“The festive demand also looks good. Gold import data was 8x in September and in the last few months, it has been very strong and Titan will have strong growth even in Q3,” he further mentioned.
Roy said, “The consumption trends are very strong, if you see Godrej Consumer, Marico, in most of the segments, growth has been decent. The festive demand is strong, based on all the data available, so companies like Titan and Aditya Birla Fashion (ABFRL), you will see a lot of pent-up demand especially for formal wear, because with mobility coming back and people going back to offices, they would like to really redo their full wardrobe. So ABFRL looks really good from the festive demand perspective.”
On paint companies, he said that they have come out with a report on JSW Paints. He said, “JSW Paints put out ads in newspapers about their differentiated positioning, mentioning that they will offer paints at one price irrespective of colour. Moreover, taking the crude pricing related impact of margins, paint stocks could be under some pressure in the near-term. The paint stocks came back very strongly and the festive demand is looking strong, so we expect paint volumes to go in double-digits. So, don't see more than 4- 5 percent dip in these kinds of companies because market share will remain strong and this is transitory in nature.”
On Reliance Retail’s tie-up with 7-Eleven convenience stores, Roy said, “This deal was something which was expected because the Reliance-Future deal was getting delayed and Future was not able to honour its commitment to the 7-Eleven.”
He further said, “This format is interesting because if you see in India, in the last 15 years, many players have tried the small box neighbourhood convenience store format but it has not been successful. There are challenges but Reliance obviously is number one in the grocery retail and they also want to be present in the omni and other parts of the retail, so for them this is definitely very important. The brand is strong and I would say they really have to tweak the assortment based on the consumption in India, like more food and private labels. So, till now this format has not been successful but it is interesting.”
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