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Buy This Bluechip Tata Group Stock With Rs. 3000 Target Price: Outperforms Nifty-50 Index
Top brokerage firm Emkay Global has given a buy rating to the stock of Titan Company. This Stock has outperformed the Nifty-50 index by 10-15pps over the last 6M/12M. Titan's strong network expansion continued, with the addition of 105 net stores across segments.
Stock To Buy: Target Price
The Current Market Price (CMP) of Titan Company is around Rs. 2770. Emkay Global has estimated a Target Price for the stock at Rs. 3000. This stock has the potential to give an 8.3% return, in the upcoming 12 months. It is a large-cap stock with a market capitalization of Rs. 243,391 crore.
| Stock Outlook | |
|---|---|
| Current Market Price (CMP) | Rs. 2770 |
| Target Price | Rs. 3000 |
| Potential Upside | 8.30% |
| 52-week high share price | Rs. 2,791 |
| 52-week low share price | Rs. 1,825.05 |
Stock Valuation
Giving a buy rating, Emkay Global stated, "We maintain our buy rating on Titan over a longer investment horizon, given continued potential for consistent earnings compounding, based on its modest market shares in several large and growing product categories. Our revised December 2023 target price is based on a higher multiple of 53x (vs. 50x earlier). Upgrade in the valuation multiple is driven by 50bps increase in our medium-term growth expectations, on higher growth expectations in Taneira/Handbags/International, as also higher long term sustainable RoE."
Q2 Earnings
After a strong revenue update in October 2022, Titan's adjusted EBITDA for Q2 was in line with the Street estimates. The company's reported EBITDA was 6-13% ahead of our/Street expectations, due to a 200bps one-off in the Jewelry segment. Jewelry momentum sustained, with 3Y CAGR of 27% in Q2, led by 6-7% expansion in transaction size, with the balance contributed by strong buyer growth. Share of new buyers also increased, to ~46% of total buyers in Q2 vs. 43% in Q1, pointing to market-share gains.
Stock upside
With India-UAE CEPA agreement, Titan received the license to import 540kg of gold with 1% concession in import duty in Q2. Allocation is expected to further increase in Q3. Titan targets Rs. 10bn worth of sales by FY27, for newly-launched women hand-wear brand IRTH. However, Titan indicated relatively slower growth in the economy-oriented price points due to inflationary pressures, while better growth is seen on the premium front.
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.
