This Rakesh Jhunjhunwala-held stock falls 3% as firm logs zero sales in first six weeks of lockdown

Share price of Titan Company slid up to 2.81% to Rs 868 compared to the previous close of Rs 893.15 on BSE

Titan Company share price fell over 2% in early trade today after the firm said coronavirus lockdown has hit sales of the firm drastically. Share price of Titan Company slid up to 2.81% to Rs 868 compared to the previous close of Rs 893.15 on BSE.

Ace investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala jointly held 5.53%  stake or 4.9 crore shares in the firm for the quarter ended March 2020.

However, Jhunjhunwala and his wife reduced stake in stock of gems and jewellery maker Titan Company to 5.53 per cent for the quarter ended March 2020. The Jhunjhunwala couple sold 1.03 crore shares of Titan during last quarter. For the quarter ended December 31 2019, Jhunjhunwalas held 6.69 per cent stake in the company.

Rakesh Jhunjhunwala first bought Titan stock in 2002-2003. Since then, the smart investor has been altering his shareholding, according to market conditions and performance of the firm.

The large cap stock has gained 4.1%  in last one week compared to a 0.55% rise in Sensex during the period. The stock has lost 25.48% since the beginning of this year and has fallen 28.59% during the last one year. The stock is trading higher than 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.

In an update on operations, the firm said it clocked nearly zero sales during the last two months of lockdown. PM Modi announced countrywide lockdown on March 24 to contain the rising number of coronavirus cases.

In last 2 months, the company's operating cash flow was negative due to virtually zero sales during the first 6 weeks of lockdown, increase in mark-to-market cash outflow on gold hedge due to rising gold prices and committed costs being incurred.

Rakesh Jhunjhunwala, wife Rekha sold 1 crore Titan shares in Q4

However, these mark-to-market cash outflow is expected to be recovered when sale of jewellery commences. Thus, the COVID-19 situation is expected to adversely affect the profitability during the first half of this year."

In Q3, Titan Company reported a standalone net profit of Rs 470 crore which was up 12.9 per cent from Rs 416.23 crore in the same period last year.

Titan Company's sales for Q3 grew 8.40 per cent to Rs 6,105.96 crore from Rs 5,632.45 crore in the same quarter last year. The overall standalone income from operations in the third quarter was Rs 6,206 crore compared to last year's income of Rs 5,672 crore during the same period. The income from operations for April to December 2019 stands at Rs 15,581 crore.

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