Titan shares tumble 5% after Q1 business update fails to impress D-Street

1) Titan Co. announced on Monday that its consumer business saw a growth of 20% in the first quarter ended June. The Tata Group-managed jewellery and watchmaker added 10 stores during the April-June quarter, taking its combined retail network presence to 3,322 stores, according to an exchange filing on Monday. 2) Its jewellery division, which contributes over three-fourths of its revenue, reported an 18% growth in the domestic market and added 19 stores. The growth in the quarter was impacted by gold price volatility, which affected consumer sentiment. "While Akshaya Tritiya period saw good traction, the increase in gold prices from May till mid-June saw some softening in customer purchases," the company 3) With the buyer growth flat for Tanishq, Mia, Zoya and CaratLane, customers preferred light weight and lower karatage jewellery. The studded ratio saw a decline driven by the differential growth across segments. Coins led with strong gains, while plain gold grew in mid-teens and studded segment growth in early double digits. The like-to-like domestic sales for Tanishq, Mia and Zoya were in early double digit, driven by ticket size growth across formats. Sales for Caratlane were in healthy double-digits of 38% 4) Jewellery business While the Akshaya Tritiya period saw good traction, the increase in gold prices from May till mid-June, saw some softening in customer purchases, a company filing to the exchanges said. Buyer growth was flat (YoY) for both TMZ and CaratLane. In the high gold rate scenario, customers preferred light weight and lower karatage jewelry. 5) Overall, the numbers are below expectation and hence stock is reacting negatively. 6) All this is for information. 7) This is not a buy/sell call. Thank you, Technofunda24