Titan shares might test Rs 1,280 level after robust Q2 update

Mumbai: Titan shares could test the Rs 1,280 level after the company on Wednesday said its jewellery business posted a recovery rate around 98%, excluding the sale of raw gold, in the September quarter.

The stock traded over 4% up intraday at Rs 1,250 a share in response to the company's Q2 update. The active futures contract saw an open interest (OI) jump of 21% intraday accompanied by a 4% jump in price at Rs 1255, suggesting long build up.

The range for the month is Rs 1,180-1,330.

The 52-week high for the stock is Rs 1,389.95, hit on October 25 last year.

"The division (jewellery) did very well in Q2, with a recovery rate of around 98% (excluding the sale of raw gold) in Q2, compared to the revenue of same quarter in the last year.," Titan said in the update.

"The walk-ins have been improving with conversion rates and average ticket size being higher compared to the same period of last year."

It said further that the "recovery rate in metros that have got impacted the most by the pandemic has been improving gradually. Non-metros seem to have recovered substantially and many cities have actually recorded growth compared to last year. Sales in September month has been decent, despite the inauspicious period of 'Shradh'. The festival season will commence about 15 days later in the current year."

However, it added that the studded jewellery ratio was yet to recover to previous year levels. Sale of Rs 390 crore of raw gold during the quarter helped improve the cash flow of the jewellery division significantly. The division added 14 Tanishq stores on a net basis in the current fiscal, with the retail space addition being 60,000 sq feet.