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The stock of Titan Company climbed nearly 8 per cent on Thursday as analysts reemphasised their buy call after the Tata group firm said its sales in the June quarter jumped almost three-fold. The stock, after hitting a high of ₹2,170.95, settled at ₹2,128 apiece — a gain of 5.69 per cent over the previous day's close. On the NSE, shares of the company rallied 5.78 per cent to end at ₹2,129.95 apiece.
In volume terms, two lakh shares were traded on the BSE and over 59.15 lakh shares on the NSE during the day. While Titan was the biggest gainer on the Sensex, it was second top gainer on Nifty after Hindalco.
In a disclosure to the stock exchanges, Titan said its “Sales in Q1 FY23 grew 205 per cent year-on-year (YoY) on a low base and clocked a 3-year CAGR of 20.5 per cent over Q1 FY20.”
Jewellery segment glitters
The company's network expansion and campaigns continued to progress well throughout Q1 FY23, which was the non-disrupted first quarter in the last three years, Titan said in its quarterly updates.
While its jewellery division, which contributes around 85 per cent of its revenue, reported 207 per cent growth and added 19 new stores during the quarter, taking the total store count to 463.
According to Centrum Broking, “We expect continued revenue momentum for jewellery led by the forthcoming festive season being strong due to deferred weddings from Q4.”
‘Demand to pick up’
Centrum, which has maintained its Buy rating on Titan with a price target of ₹2,817, said, “We expect strong demand across divisions to drive revenues and margin expansion.”
Emkay Global Financial Services said, based on the update, “we expect Titan to report a solid three-year consolidate revenue CAGR of 22 per cent at ₹9,300 crore. Improvement in the studded mix and operating leverage should lead to about 800 bps YoY improvement in its EBITDA margins to around 12 per cent. We estimate a consol PAT of ₹730 crore in Q1-FY23 vs ₹20 crore in Q1-FY22”. The brokerage set a price target of ₹2,530 with Buy rating.
Motilal Oswal also retained its Buy rating on Titan with a price target of ₹2,900. “Titan remains our top pick in the large-cap Consumption space in India, with strong earnings growth visibility and compounding by about 20 per cent for an elongated period of time. In the jewellery industry, which is organising at a rapid space, Titan is clearly at the vanguard among organised players in leading this growth,” it added.
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