Titan Company Limited is a large-cap company whose market capitalization 2,17,356.69 crore who works in the consumer discretionary industry. Titan Company Limited (Titan), a joint venture between the Tata Group and Tamil Nadu Industrial Development Corporation (TIDCO), is the world’s fifth largest integrated brand watch manufacturer. Titan shares are trading at market rate now 2,446.95 per share on NSE, and the stock has provided a multibagger return of 303.12 per cent over the last five years. Shares hit 52-week high 52-week low of 2,768.00 and 21-March-2022 1,763.20 as on 05-August-2021, indicating that the stock is trading at 11.59 percent below the 52-week high and 38.77 percent above the 52-week low at the current market price. After Titan’s Q1FY23 earnings, brokerage houses ICICI Securities and Sharekhan are bullish on the stock’s new higher potential. ICICI Securities has set a target price of 2800 for Titan shares, while Sharekhan . given a target price of 2,900, which will be a new high for the stock.
Sharekhan said in a note that “Titan Company (Titan) started FY2023 on a strong note, with revenues (excluding bullion sales) growing 3.0x to Rs.8,975 crore (including bullion 2.7x to Rs.9,443 crore). .Revenue grew by 20% YoY on 3-Year CAGR basis and Jewelery sales grew 23% CAGR over the same period.Jewelry business revenue grew by 3.0% YoY to Rs.2,600 Crore (Ex-Bullion), While the revenue of watches and eyewear business grew by 2.7x each to Rs.785 crores to Rs.183 crores respectively. Titan’s subsidiary, Caratlane registered a strong performance by posting revenue of Rs.482 crores and profit of Rs.27 crores. TEAL reported revenue of Rs.88 crore and loss of Rs.6 crore (before taxes) during the quarter by 25.5%, with consolidated gross margin and EBITDA margin growing by 307bps and 872bps respectively on account of better operating leverage and better mix. and rose to 12.7%. EBITDA grew 8.7x year-on-year to Rs 1,196 crore. Reported PAT stood at Rs. 790 crore vs Rs. Q. 18 crores in 1FY2022. The company has added 125 stores during the year (net). The company’s retail chain (including Caratlane) had 2,303 stores in 366 cities with an area of over 2.9 million square feet as of June 2022.”
“Titan aims to grow its revenues at a CAGR of over 20% during FY 2022-27 on the back of its ambitious growth plan in the medium term. This will help in improving cash flow strongly in the coming years with consistent improvement in margins. FY2023 will be a strong year for the company due to a low base in core businesses. The stock is currently trading at 67.9x and 53.7x its FY2023E and FY024E earnings. The company’s strong growth outlook, industry tailwinds over the medium term and strong balance sheet make it one of the best sports in retail. Hence we maintain our buy recommendation on the stock with an unchanged price target of Rs. 2900,” said research analysts at broking firm Sharekhan.
ICICI Securities said in a note that “Titan reported a healthy operating performance with a strong beat on the margin front. Buoyed by a strong festive/wedding season and a normal quarter after a gap of two years, the Jewelery Division reported a healthy operating performance. Recorded its second highest quarterly revenue in the first quarter of FY 2013. As directed by the management in its pre-quarter update, the jewelery division (excluding gold bullion sales) posted strong year-on-year sales growth of 204% registered. 7995 crore (impressive three-year CAGR: 24%). Watches segment registers 169% year-on-year growth 786 crore (110% of pre-covid levels), while the eyewear division registered a growth of 173% year-on-year 183 crore (123% of pre-covid levels). Overall Consolidated Revenue (Including Gold Bullion Sales: 356 crore) up 172% y-o-y 9443 crores. Strong EBITDA margin (up 870 bps YoY to 12.7%) led by improved studded ratio and positive operating leverage. was at absolute EBITDA 1196 crores with a strong three-year CAGR of 28%.”
“Titan has been a phenomenal performer in the discretionary space, with the stock price appreciating ~32% CAGR over the past five years. We remain structurally positive on the stock as the high growth visibility justifies the premium valuation and Maintains BUY on Stock.We value Titan 2800 i.e. 66x FY24E EPS,” said research analysts at broking firm ICICI Securities.
Strong balance sheet and asset light distribution model has enabled it to beat peers in terms of store additions (to add 40+ Tanishq stores in FY23), aspires to grow jewelery revenue 2.5x by FY27 (Implicit CAGR: 20%). ~6% in . Huge headroom for growth with existing market share at 4 lakh crore market, buoyed by the wedding space, wedding jewelery is becoming a significant growth driver while its share in overall jewelery revenue has grown significantly and in proportion buoyed to aid in gross margin There has been a gradual correction, the key markers for the future are Titan’s price performance as per ICICI Securities.
As per Titan’s shareholding pattern available on BSE, veteran investor Rakesh Jhunjhunwala holds 3,53,10,395 shares of Titan or 3.98% stake in the company and his wife Rekha Jhunjhunwala holds 95,40,575 shares or 1.07% stake in the company. of June 2022.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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