Titan Company Ltd has faced turbulent months recently, with its stock dropping 17% over two months. The fall stems largely from weaker-than-expected Q2 earnings and a significant contraction in profit margins. Titan reported a 23% decline in net profit to ₹704 crore despite a 25.8% surge in revenue to ₹13,473 crore. However, the EBITDA margin plummeted by 430 basis points to 9.9%, underscoring the impact of higher customs duties and an unfavourable product mix.
The jewellery segment, a cornerstone of Titan's operations, experienced its second consecutive quarterly profit decline. While Watches, Eyewear, and Wearables contributed to revenue growth, the jewellery division's reduced margin due to weak solitaire demand has dampened investor sentiment.
For those looking to invest in stocks, Titan's current price levels present an opportunity for strategic accumulation. Experts suggest monitoring the ₹3,100 support level closely, as a rebound could signal short-term recovery potential.
Technical and market trends
Technically, Titan's chart reflects bearish momentum, with the stock down 18% from its all-time high of ₹3,885 recorded in January 2024. Analysts have highlighted a triple-top pattern, indicating potential further weakness if the stock breaks below ₹3,100. Conversely, a move above ₹3,250 could initiate a rally toward ₹3,500.
Despite these short-term challenges, Titan's fundamentals remain strong, making it a great choice for long-term investors keen to invest in stocks during corrections. Market analysts believe the upcoming wedding season could revitalize the jewellery segment, offering hope for improved profitability and margin recovery in the coming quarters.
Key takeaways
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