Be cautious on Titan, says Sanjay Singh

Standard Chartered Securities' consumer analyst Sanjay Singh told CNBC-TV18, “Titan was our top pick for last two and half years, it was a buy for us. We have just downgraded the stock on Friday to an inline. I think what is happening in Titan is stock had a very good run in the last couple of months mainly because of strong news flow on demand post the gold price correction. However the gold price again has slipped off from USD 1450-1475 levels to USD 1350. And we believe that the demand will now not be able to catch up. The initial fall was caught up by retail but now demand will not be as strong. Hence we are little negative on Titan at this point of time.”

Singh further said, “Also lot of margin drivers which were present in FY13 may not be present in FY14 hence you could see jewellery margins may be falling a tad short coming down year on year for the very first time in 8-10 years. And given the demand scenario and given the margins we are little negative on Titan. Also the regulatory reasons are not completely over. While we do not believe it will hurt Titan strongly but it still is a cause of concern per say and it is not there in our numbers yet. So coupled with demand, regulators and margins for jewellery, we believe one should be cautious on Titan at this point of time.”