Should you buy Rakesh Jhunjhunwala backed Tata stock after Q2 prints?

on Friday, Titan shares closed 2730.50 per up by 136.80 or 5.27% on BSE. The market valuation of the company is approx. 2,42,410.01 crore.

In the September 2022 quarterly update, Titan reported healthy double-digit growth across most businesses, with overall sales growing 18% year over year. The retail network continued its expansion momentum by adding 105 stores (net) for the quarter. jewelery The division grew 18% in Q1FY23, while the watches and wearables business grew 20%, the highest quarterly revenue. In addition, the company’s eyecare business grew 7% and revenue from other businesses grew 58%.

Titan said in its regulatory filing, “The outlook for Celebration The season (from Navratri to the end of September 22) remains optimistic and is reflected in positive consumer sentiment across categories.”

Shares of Titan gave double-digit growth to its investors in the September 2022 quarter. The family of late market stalwart Rakesh Jhunjhunwala is among the investors who have benefited from the strong rally in Titan shares.

Rakesh, one of the most influential investors in the Indian stock market, passed away on 12 August this year. In his portfolio, his most valuable stock was the Tata Group-backed Titan. After Rakesh’s demise, his property including shares and property has been given to his family. Jhunjhunwala is still one of the major investors in Titan.

As per the shareholding pattern, Rakesh and his wife Rekha Jhunjhunwala together hold 44,850,970 equity shares or 5.1% in Titan as on June 30, 2022.

As per Trendile data, the shareholding value of Jhunjhunwala in Titan is around 12,246.6 crore as on October 7, 2022.

Between July and September 2022, Titan shares have gained over 34 per cent. Meanwhile, from its 52-week low 1,827.15 crore as on January 7, 2022, the shares have risen by over 49% so far.

Should You Buy Titan Shares After Q2 Provisional Numbers?

“Titan’s Q2FY23 business update suggests a strong 3-year consolidated revenue CAGR of 24%,” said analysts Devanshu Bansal and Jigisha Kapoor, Emkay Global, in their report. The Jewelery Division (Ex-Bullion) posted a strong 3-year revenue CAGR seen 27% (vs.

18-20% CAGR over the last three quarters), while the watches/eyewear segment witnessed relatively slow growth at 4-5% CAGR. Furthermore, Caratlane maintained its strong growth trajectory with a CAGR of ~50%. The segment continued strong network expansion with 105 net stores (~100-125 in recent quarters), with 25/23/38/14 additions in the Jewellery/Watches/Eyewear/Caratlane segment. in our view,

A strong Q2 and an optimistic celebration commentary should upgrade consensus estimates, as the Street is currently factoring in lower growth from Q2-Q4FY23 (versus our expectations of ~15% growth).”

Both expect Titan to post a solid 3-year consolidated revenue CAGR of 24% 88.5 billion. Also, analysts expect its EBITDA margin to improve ~40bps year-on-year to 13.3% on the back of improved studded mix and operating leverage.

MK Q2FY23 vs. Estimated console PAT of Rs 7.7 billion in 6.4 billion in Q2FY22.

Meanwhile, Shirish Pardeshi Research Analyst at Centrum said, “We expect continued growth in revenue as demand is expected to pick up at the end of September ’22 given strong buying opportunities like Navratri. However, weak consumer footfall in July. Owing to the August autumn period, saw a strong correction in September 22. We believe that the continued sales momentum across the business divisions is positive on players like Titan benefitting organized jewelery retail. Further, we expect strong demand momentum for watches and eyewear to continue. Looking at consumer dynamics. We maintain our earnings with DCF-based TP of Rs 2,817 (69.5x FY24E EPS) and Keep the BUY.”