Reputed brokerage firm Sharekhan has recently given a buy rating to the stocks of Titan Company Ltd., and mentioned a target price of Rs. 1,475, within 1 year. The firm thinks, "The company registered strong recovery in demand across all business verticals in Q2FY2022. Strong recovery in demand will also lead to sequential and y-o-y improvement in profitability."
The Current Market Price (CMP) of Titan Company Ltd. is Rs. 2,596. Sharekhan estimated a Target Price for the stock at Rs. 2,900. Hence this company stock is expected to give an 11.71% return, in 1 year.
|Current Market Price (CMP)||Rs. 2,596|
|Target Price||Rs. 2,900|
|1 year returns||11.71%|
Titan's demand has been robust across consumer businesses, growing by 36% (at standalone level), as compared to the festive quarter last year. Core jewellery business increased by 37% y-o-y (29% CAGR over two years), while watches and eye-wear segment grew by 28% and 30% respectively. Key subsidiaries such as Caratlane registered a strong growth of 64% during Q3FY22. Overall the company is expected to post strong performance in Q3. Sharekhan informed Titan's jewellery business revenues has grown by 37% y-o-y (29% CAGR over two years) led by strong festive and wedding season demand. Watches and Eyewear businesses crossed pre-Covid sales.
Comments by Sharekhan
Maintaining the buy rating, Sharekhan said, "Titan witnessed strong demand across its consumer businesses, with standalone revenue growth of 36% y-o-y in Q3FY 2022. With strong operating leverage, OPM is expected to expand by 150 bps on a y-o-y basis to 12.6%. Titan is well-poised to achieve strong revenue and PAT CAGR of 22% and 54%, respectively, over FY 2021-24. Revenues grew by 18% on 2-year CAGR basis." However, it added, "Emergence of the third wave of pandemic might be a risk to near-term performance."
About the company
Titan is a joint venture between Tata Group and Tamil Nadu Industrial Development Corporation (TIDCO). The company is a leading organized jeweller in India with its trusted brand, Tanishq. Titan is the 5th largest integrated own brand watch manufacturer in the world. The company's key watch brands are Titan, Fastrack, and Sonata. The company is present in the eye-wear segment with its brand, Titan Eyeplus, and in other segments such as perfumes. The company recently entered the saree market with its brand, Taneira.
The above stock was picked from the brokerage report of Sharekhan. 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.