Should you Buy Titan Stocks? Titan Company shares were trading higher on Thursday, a day after the company posted a 50 per cent year-on-year jump in standalone net profit at Rs 734 crore in the March quarter of the financial year 2022-23. Total revenue came in at Rs 8,753 crore, rising 25 per cent.
Revenue from operations surged 33% on-year to Rs 9,704 crore for the quarter under review. The same stood at Rs 7,276 crore in the year ago period. The company’s EBIT (earnings before interest and taxes) rose 37% to 1,053 crore, while EBIT margins stood at 12%.
Titan shares were trading marginally higher at Rs 2685 in Thursday’s trade on BSE.
The jewellery segment grew by 24 per cent to Rs 7,576 crore in the March quarter. The Indian business grew by 21 per cent in the same time. The wedding segment saw a comeback with growth rates marginally higher than the overall retail sales growth said Titan.
The watches and wearables segment recorded a total income of Rs 871 crore, up by 40 per cent, backed by strong growth in the analog watches segment and a multi-fold increase in wearables.
The business hit a milestone of Rs 5000 crore-plus of annual uniform consumer price (UCSP) retail sales and total sales of 1 million-plus smartwatches.
“The year gone by witnessed several firsts for Titan. The jewellery, watches and wearables, and eyecare achieved landmark milestones of annual consumer retail sales. After a satisfying performance across all the segments during FY23, we are well prepared and looking forward to an exciting FY24,” said C K Venkataraman, MD, Titan.
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Jefferies has tweaked its FY2023-25 earnings by 1-2%. It retains ‘Hold’ with a revised price target of Rs 2,550 from an earlier target of Rs 2,700.
The management has reiterated its medium-term growth trajectory of 20 percent, and franchisee margin changes are expected to improve the business mix. Additionally, the company has received encouraging responses from its international business and plans to scale up rapidly in FY24.
Despite a soft March due to high gold prices, Titan’s jewellery growth remains robust, and the company’s other businesses are scaling up quickly, CLSA said. “Comprehensive growth across segments and outlook is optimistic,” it added. CLSA has rated Titan a “buy” with a target of Rs 3,210.
Motilal Oswal maintained a Buy rating on Titan with a price target of Rs 3,080. Titan boasts of an outstanding track record that surpasses its peers, with superior short-term growth prospects, and exceptional long-term growth potential, all of which justify its high valuations, it said. The target price is premised on 55xFY25E EPS.
Amnish Aggarwal, Head of Research, Prabhudas Lilladher maintained a Buy on Titan for a price target of Rs 2,956. He highlighted strong revenue print amid disappointment in margins. The analyst said that strong momentum continues across all key business segments aided by strong network expansion and strong consumer confidence. The stock trades at 49.6X FY25 EPS.
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