segment's (adjusting for one-off bullion sales) recovery of 98 per cent is remarkable. The first 10 days of the festive season, even when compared to the corresponding (non-Covid) period last year, show single-digit year-on-year (YoY) growth. This, along with likely bunching up of wedding dates in October-December quarter (Q3FY21), offers hope that recovery to normalcy may actually take place (compared to continued guidance for Q4FY21),” Motilal Oswal Financial Services (MOFSL) said in the September quarter result update.
However, the brokerage firm assumes 2 per cent jewelry sales decline in Q3FY21 as jewelry sales growth base was higher in Q3FY20 compared to Q2FY20, and unfavorable gold price movements could affect near-term demand, it said.
The brokerage firm further said the store expansions continue unabated, indicating the company's and franchisees' confidence on medium and long-term growth prospects. This would further increase the opportunity to gain from the unorganised and other organised players as they are expected to struggle even more going forward (barring in Q1FY21, wherein they may have benefited ephemerally due to windfall gains owing to un-hedged gold).
Titan’s medium-to-long-term earnings growth opportunity is best-of-breed, which is reflected in the 24 per cent EPS CAGR over the past three years. There is a strong growth runway given the company’s market share of less than 10 per cent and the continuing struggles of unorganised and other organised peers, it said.