Titan Company reports a drop in stock price to 4%, net loss of Rs 270 crore during the quarter

The Titan company faced a drop in stock price to 4% incurring a net loss of Rs. 270 crore.

The Titan Company on Tuesday reported a drop in stock price to as much as 4% to Rs. 1,057 on the BSE. The company on Monday had posted a pre-tax loss of Rs. 335 crore for Q1 of FY21. Hit hard by the COVID-19 pandemic and the lockdown the firm is faced with a decline of 62 percent in consolidated revenue for the quarter. The total income has declined to Rs. 1,862 crore as compared with Rs 4,939 crore in the corresponding quarter of the previous financial year.

“Q1 earnings were weaker than consensus estimates and the macro and business headwinds will likely outweigh market share gain,” said the global brokerage Morgan Stanley in a rating rationale.

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The company also registered an EBITDA loss of Rs. 246 crore in Q1FY21 in comparison to EBITDA gain of Rs. 565 crore in Q1FY20.

Brokerages remain mixed on the stock after the result announcement.

Analysts at Goldman Sachs have maintained a “Sell” on Titan with the target price of Rs 705 per share. The brokerage notes that the company’s reported sales at 4% is below its estimate.

However, according to a result report by domestic brokerages, Prabhuda Lilladhar said, “Titan’s long term structural story remains intact on account of market share gains, strong balance sheet, franchisee based model, strong brand, and a strong head start in executing strategies like customer safety and Omni Channel across product segments.” The brokerage has set the target price at Rs 1,057.