The share price of Titan climbed nearly 3% in an otherwise weak market on Monday after the company reported Q3 jewellery revenue growth at 11 per cent. This coupled with rising gold prices, that crossed above Rs 41,000 mark in the domestic market today, boosted the stock.
Buoyed by the development, Titan stock touched an intraday high of Rs 1,170, rising 2.68% intraday against the previous closing value of Rs 1,139.50 on BSE. Titan was the top gainer on Nifty today. In contrast, the BSE Sensex was trading 800 points, or 1.93 per cent, lower at 40,657.
On the volume front, the stock was trading above the 5, 10 and 30-day average volume, with 1.20 lakh shares and 32.60 lakh shares changed hands on the BSE and NSE counters. The rise in share price is in line with 'Other Apparels & Accessories' sector that traded 1.59% higher today.
The stock price of Titan, one of the biggest stocks in the portfolio of ace investor Rakesh Jhunjhunwala, has decreased nearly 2.9% in one week, 1% in one month and 2.37% year-to-date. Titan stock was trading lower than its 5, 20, 50, 100 and 200-day moving averages
In an exchange filing, Titan said it reported 11% growth in jewellery sales in the period, in line with the company's revised projections for the second half of 2019-20.
Titan said it witnessed better-than-expected retail jewellery sales growth in the festive season, with jewellery retail sales picking up at the start of the three-month period owing to the wedding season, between November and January.
However, the company's watches & wearables division's growth for Q3 was flat compared to the previous year. "Market for watches itself is estimated to have declined by around 4% due to poor customer sentiment and this led to primary sales to trade and e-commerce channels declining sharply," the company said.
Titan's eyewear business grew 2% in revenue as a competitive activity, lower primary sales to trade channels and the disruption in the second half of December due to the nation-wide protests impacted the sales after two strong quarters. Growth for the year as a whole was good at 14%, the filing added.
"Sales in all divisions in the second half of December was also impacted to some extent due to forced store closures due to the protests in the North East and in many other parts of the country," it added.
Subsidiaries TEAL continued to grow at a very strong pace of 55% in Q3, while CaratLane's sales growth for the quarter stood around 65%. In other businesses, 'Fragrances' section witnessed good growth in excess of 20% during the quarter over the same period last year.
Besides reasonable sales in December quarter, soaring gold prices also led to the rise in the share price of the jewellery stock, as an escalation in gold prices helps the company improve its profit margin.
On Monday, gold prices continued to trend upwards, hitting multi months high amid increased geopolitical tensions in the Middle East. Gold 05 Feb 2020 Futures on the Multi Commodity Exchange spurted by another Rs 984 or 2.5% to a record high of 41,096.00 per 10 gm during the day.