Titan in a tight spot as buyers stay away from gold

• Shares of Titan fell nearly 3% as its jewellery business took a hit in the March quarter due to COVID-19 and weak consumer sentiment due to the Russia-Ukraine war.
• Meanwhile, the watches and wearable segment grew 12% in the quarter adding 34 stores.
• The company believes the underlying demand continues to be strong across all of its businesses.

Shares of luxury products firm Titan Company that mainly manufactures fashion accessories such as jewellery, watches and eyewear fell nearly 3% on April 7 as its major jewellery business took a hit in March quarter due to COVID-19 and weak consumer sentiment due to the Russia-Ukraine war.

Analysts at Kotak Institutional Equities view the volatile March quarter as a ‘blip in a promising story’. They believe weak sales is because of a 10% surge in gold price in March 2022 and expect demand recovery as gold price stabilises.

Any rally in gold price adversely impacts jewellery demand for a few weeks as consumers defer demand.

One of Titan’s major divisions, jewellery, fell 4% in January-March quarter as “business saw subdued activity in top cities due to the Omicron wave in Jan'22, a very strong resurgence in Feb'22 and again a drop in customer purchases in Mar'22 on the back of sharp rise in gold prices and sentiment impact due to the external geo-political conflict,” said the company.

The company said that it finished the quarter on a satisfactory note despite Q4 of FY22 getting disrupted twice – first due to the partial lockdowns caused by Omicron wave in January and again during the month of March in which consumer sentiments got affected adversely due to sharp increase and volatility in gold prices and uncertainty due to a fragile geo-political situation.

Meanwhile, its other segment including watches and wearable and eyecare made good progress. The watches and wearable segment grew 12% in the quarter adding 34 stores.
At 10:35 a.m., on April 7, shares of the company were down 2.13% at ₹2,479 per share.

$TITAN.NSE This one seems to have completed 5 waves up from March 2020 lows of 716 to 2768 high made recently. The stock now remains a sell on rise candidate as long as it is below 2768 high. It can correct this upmove gradually upto 2200/2020/1780 levels in coming weeks. #ElliottWaves

— (@prashant280294) April 07, 2022

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