The 4.81 per cent stake the couple owned in the jewellery maker at the end of June quarter was their lowest ever holding in the owner of Tanishq brand since September quarter of 2006, as per data compiled by AceEquity. This was the third straight quarter when the Jhunjhunwalas have cut stake in the jewellery firm.
To recall, the largest non-institutional minority shareholder of Titan Company had in April this year had complained to the company management over its dividend payout for FY21 and its dividend policy in general.
“As a shareholder, I am sorely, sorely disappointed. I don’t know what are you going to do with the cash,” Jhunjhunwala had said in April.
“You are taking a cash call. And what are you going to use it for? The sales, you yourself are saying, are good. So, I don’t understand the reason why the honourable board has decided to prune the dividends,” Jhunjhunwala said.
Jhunjhunwala along with his wife Rekha Jhunjhunwala held 5.1 per cent stake in the jewellery maker at the end of March quarter. The duo still owns Rs 7,230 crore worth of Titan shares at their current prices.
Brokerages are largely mixed on the company’s prospects.
Emkay Global sees limited upside for the stock with a target of Rs 1,810. Prabhudas Lilladher pegs the stock’s value at Rs 1,869. Motilal Oswal Securities finds the scrip Rs 2,040 worthy. Among foreign brokerages, Macquarie sees the stock at Rs 1,750, CLSA has a target of Rs 1,370 while Morgan Stanley pegs its value at Rs 1,358.
On Thursday, the scrip traded at Rs 1,703.10, down half a per cent.
The majority of analysts, meanwhile, agree that the Tata Group firm has the potential to recover smartly, as it did in FY21, when the jewellery firm logged positive sales growth for the year after reporting a 62 per cent year-on-year drop in sales for the June quarter of 2020.
In its quarterly update, the jewellery maker said sales grew 117 per cent YoY in the June quarter, excluding bullion sales, aided by the last year’s low base. The jewellery business saw 107 per cent growth, the watches & wearables segment expanded 280 per cent while the eyewear business grew 117 per cent.
Based on the management commentary, Emkay projects the Tata group firm to report 52 per cent revenue growth for Q1, down 60 per cent sequentially. Ebitda is likely to break even, but the firm may report losses of Rs 57.20 crore for the quarter compared with a Rs 270 crore loss in the year-ago period.
Prabhudas Lilladher has cut its FY22 EPS estimates for Titan by 21.3 per cent and FY23 estimates marginally by 0.8 per cent, factoring in the impact of the second wave of Covid.
Titan said while April saw strong momentum, the second wave of Covid and the subsequent store closures as well as restricted operating hours hurt May sales before the comany clocked some recovery in June. Stores were opened for 73 per cent of days in April, 10 per cent in May and 58 per cent in June.
