Buy This Stock For 17%, In 1 Year: Emkay Global Given Buy Rating

Emkay Global, a reputed brokerage firm suggested investors to buy the stocks of Titan Company for 17.20% return. The company's growth momentum continues; margins surprise positively.

Target Price

The Current Market Price (CMP) of Titan Company is Rs. 2475. Emkay Global has estimated a Target Price for the stock at Rs. 2900. The stock is expected to offer a 17.20% upside, in 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 2475
Target Price	Rs. 2900
1 year return	17.20%

Company performance

Titan's Q3 performance exceeded our expectations, with EBITDA/PAT growth of 63%/135% beating est. by 12-15%. Margins surprised positively, with the jewelry segment reporting an EBIT margin of 14.6% (up 320bps yoy), driving 68% growth in jewelry EBIT. Ex-bullion sales, the Jewelry segment grew 37% in Q3 and posted a healthy 2-year CAGR of 26%. The strong sales CAGR was driven by a ~15% jump in ticket size vs. pre-pandemic levels, higher footfalls/conversions, and a ~9% CAGR in the store count. Watches/Eyewear segments also posted 26-29% growth and a 2-year CAGR of 6%/9%, helped by a 3%/7% store count CAGR and a pick-up in the wholesale channel for watches.

Comments by Emkay Global

Emkay Global stated, "Titan attributed the strong trends to buoyant jewelry demand during the festive season and new customer acquisitions, aided by its regionalization strategy. The turnaround in Eyewear, which drove the segment's EBIT margins to ~22%, was led by the change in product/channel mix, while operating leverage has helped Caratlane margins. With strong growth visibility and a healthy improvement in the profitability of Eyewear/Caratlane businesses, we maintain our positive view on Titan. Network expansion should remain strong, and the company targets 30-40 store openings in jewelry. Eyewear is seeing significant acceleration, with the addition of 53 stores in Q3."

About the company

Titan Company Limited (Titan), a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO), commenced its operations in 1984 under the name Titan Watches Limited. Titan is the fifth largest integrated own brand watch manufacturer in the world. Titan, Titan Clock, Fastrack, Sonata, Zoop, Octane, Xylys, Helios, Titan Raga, Favre-Leuba, Nebula, SF, Tanishq, Mia, Zoya, CaratLane, Titan EyePlus, Skinn, and Taneira are Titan's brands.

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Disclaimer

The above stock was picked from the brokerage report of Emkay Global. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.