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Motilal Oswal
Titan (Buy)
CMP: ₹946.05
Target: ₹1,125
Titan Company Ltd is engaged in offering watches, jewellery and others.
Jewellery segment capitalised well on seasonal strength to report robust growth in 3QFY19. Management cited that the segment expanded its market share on account of robust same-store sales growth.
Watches saw another strong quarter, which was also supported by its brand-building activities across channels.
Prescription Eyewear business also sustained growth momentum due to its strategy of offering more assortments at affordable price points and aggressive marketing spends. The frame distribution business is making good progress.
We maintain our ‘Buy’ rating on Titan with a target price of ₹1,125 (valued at 47x Dec’20E EPS, 10 per cent premium to three-year average multiple because of strong earnings growth prospects — 26 per cent EPS CAGR over FY18-20E).
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