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Titan sheds over 4% after weak Q1 earnings; global brokerages revise ratings on weak demand outlook

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Titan shares dropped over 3 percent in the early morning trade on Tuesday after the company reported a weak set of numbers for the quarter ended June hit by the coronavirus-induced lockdown.

Titan sheds over 4% after weak Q1 earnings; global brokerages revise ratings on weak demand outlook
Titan Company stock price dropped over 4 percent in early trade on Tuesday after the Tata Group firm reported a weak set of numbers for the quarter ended June hit by the coronavirus-induced lockdown. The shares fell as much as 4.58 percent to Rs 1,057.05 on the BSE. At 10 am, the stock traded 4.36 percent lower at Rs 1059.45 apiece.
The jewellery and watchmaker Titan Company reported a standalone net loss of Rs 270 crore in the first quarter of fiscal 2021 as against a net profit of Rs 371 crore in the year-ago period. Revenue during the quarter declined 62.3 percent to Rs 1,862 crore from Rs 4,939 crore, YoY.
Operating performance weakened as the company registered an EBITDA loss of Rs 246 crore in Q1FY21 as against EBITDA gain of Rs 565 crore in Q1FY20.
Global brokerage Morgan Stanley said that the company’s Q1 earnings were weaker than its and consensus estimates and believe that the macro and business headwinds will likely outweigh market share gains. It expects a full-fledged demand recovery to remain elusive in FY21.
The brokerage maintained an underweight rating on the stock with a target price of Rs 807 per share.
Goldman Sachs maintained a sell call on Titan with a target price at Rs 705 per share as the company's reported sales at 4 percent is below its estimate. The brokerage expects jewellery segment to deliver 4 percent PBIT growth between FY19-22 and expects 9 percent EPS CAGR (FY20-23).

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