Titan said it has opened around 43 per cent of its stores across all businesses
Shares of Titan Company
declined as much as 2.81 per cent to Rs 868 on the BSE on Wednesday after the company said its operating cash flow in the last two months was negative due to 'virtually zero' sales during the first six weeks of lockdown. Titan also deferred the launch of two its jewellery collections till a time that most of the stores are re-opened.
Sharing its business update amid the Covid-19 pandemic, the jewellery-to-watches maker said that increase in mark-to-market cash outflow on gold hedge due to rising gold prices and committed costs being incurred also contributed to the negative cash flow. However, it expects this cash outflow to be recovered when sale of jewellery restarts. “Thus, the Covid-19 situation is expected to adversely affect the profitability during the first half of this year,” Titan said.
In a BSE filing, the Bengaluru-headquartered company said it has opened around 43 per cent of its stores across all businesses till date, all the mall stores continue to be closed.“Based on representations being made by various industry associations, the company is hopeful that malls will also be opened in the next few weeks in non-containment zones along with High Street stores,” it said.
Titan said the sales in stores that have opened up are at around 50 per cent of that in normal period, but the situation is improving gradually. “These are early days and the company is not in a position to gauge with certainty the future impact on operations but expects normalcy to be achieved only after a quarter,” it said.
According to Titan, customer sentiment to reduce spends on discretionary items is also likely to impact demand for most of the company’s products including watches, jewellery, perfumes and accessories.
While manufacturing activities have restarted gradually in most of the facilities, production ramp up will be based on current inventory levels and the Company‟s estimate of demand. On the supply side, vendors have re-started their production and are ready to provide required supplies, it said.
Ace investor Rakesh Jhunjhunwala had reduced his stake in Titan Company
during the March quarter by over one percentage point, or 10.3 million shares.
At 9:40 AM, the stock was down 2.03 per cent at Rs 875.05 and was the top Sensex loser. In comparison, the Sensex was flat. Around 9.4 lakh shares have already changed hands on the NSE and BSE so far, combined.