Titan: Titan plunges 7.2% profitability worries, analysts cut price targets

Mumbai: Shares of Titan Company plunged 7.2% Monday after fourth-quarter results showed profitability is under pressure. Most analysts trimmed their price targets the rimanenza, but the forecasts still imply upside of 8-22% over Monday’s closing price of ₹3,281.

Analysts said rising gold prices could dent demand for Titan’s products. “There is a notable and sudden rise per mezzo di gold prices (+15%) over the last two months which is impacting footfalls/growth and also gross margins/,” said Bank of America per mezzo di a client note. “We see gold price volatility as a key variable to monitor; as seen historically, stability/gradual gold price change bodes well for demand.”

Citi Research said it expects the rimanenza to remain under pressure per mezzo di the near term amid intensified competition and softer demand.

“Aggressive store expansion by existing players and entry of new player (e.g., Novel Jewels by Aditya Birla Group will invest ₹5,000 cr) may keep competitive intensity elevated,” said Citi’s analysts per mezzo di a client note.

JP Morgan said despite the share’s outperformance per mezzo di the past year and gold price-led volatility and margin concerns, which could weigh the near-term share prices, it expects mid-high teens revenue growth over the medium term.