Mumbai: India’s biggest gold jeweler is emerging stronger from the coronavirus pandemic. Shares are heading for the best quarter in nearly three years as investors bet on a recovery in demand ahead of the key festive season and as an economic slump weakens its competitors.
Titan Co. has jumped nearly 23% in the quarter ending Sept. 30, the most since the three months ended December 2017. That compares with a near 9% increase in the benchmark S&P BSE Sensex.
The rally comes as local gold prices head for a second consecutive monthly loss, capping gains of about 30% this year. The drop in prices, while still near record highs, comes ahead of India’s festival season that gathers pace from mid-October and peaks around Diwali, which falls in November this year.
Buying and gifting of gold is usually considered auspicious during this period by Hindus and with consumers in the world’s second-biggest buyer getting used to high prices, any correction is likely to lead to a rush to stores, ICICI Securities Ltd. said in a note last week.
“Gold itself being in a bull market has catapulted the stock,” said Sanjiv Bhasin, director at IIFL Securities Ltd. Additionally, “Indians’ spending by nature is very, very strong on gold” and the festival season should bode very well for a “pedigree stock” like Titan, he said.
Titan also stands to gain from the financial distress faced by smaller jewelers after the economy contracted 23.9% last quarter following one of the world’s strictest lockdowns. Regional unorganized jewelers are under pressure from liquidity constraints, funding issues and limited ability to sell online, providing bigger companies like Titan an opportunity to gain market share, ICICI Securities said.
India’s gold demand has been slammed this year by lockdowns imposed from March end to control the coronavirus outbreak. While the restrictions have been slowly eased over the last couple of months, jewelers are staring at record-low sales of the precious metal as the economy contracts sharply and prices remain near all-time highs.
“When gold prices go up, the inventory value goes up. So that is one factor,” which will help Titan as its margins will improve, said A.K. Prabhakar, head of research at IDBI Capital Market Services Ltd. “So even if there is a 10%-20% dip in revenue, their margins compensate in big numbers.”- Bloomberg
Also read: How India’s strict lockdown choked gold smuggling routes to country
18 carat gold earrings ( Bali) about 8 grams
Its game plan of market punters and so called buffet of markets to tempt people to buy this stock, its nothing differant all Organised Gold Jewellary players are having good business and its not only tanishq, these kind of news looks managed, go thru 1 st Quarter results of Co there are many unexplained points and every player in market have good sales in July-Sept Q2 except pitrupaksha 15 days of Sept.
Hi,ist good to buy Gold now please advise ASAP, thanks
Regards,
Vanes M