NEW DELHI: TitanNSE -0.89 % Company, seasoned investor Rakesh Jhunjhunwala’s biggest stock bet, has surprised brokerages positively with its third quarter business update.
For foreign brokerage Citi, the jewellery segment threw a big positive surprise as healthy trends were seen across segments. Festive and marriage season trends were encouraging, it said while suggesting a Rs 2,975 target on the stock.
Emkay Global has upped its earnings estimates for FY23 and FY24 EPS by 8-9 per cent and raised its December 2022 target to Rs 3,000 from Rs 2,770, valuing the stock at 65 times December 2023 EPS.
On Friday, the scrip rose 3.48 per cent to hit a high of Rs 2,687.30. The company commanded a market value of Rs 2,36,195.51 crore. Jhunjhunwala and his better half Rekha owned 4.87 per cent stake in the company, which was worth over Rs 11,500 crore.
Edelweiss said Titan continues to turn in an impressive industry-leading performance and has been among the biggest beneficiaries of the shift from unorganised to organised segment in jewellery. Given its brand heft, as also the trust that the Tata name evokes, the company has managed to outpace other large jewellers, Edelweiss said.
“We expect this trend of market share gains to sustain, driving its multi-decade growth. Furthermore, the company is currently only present in 220 cities, and has a target to extend its presence to 500-plus over the next five years. We maintain our target EV/Ebitda at 65 times (FY23E EBITDA) with an unchanged target of Rs 2,867,” it said.
In its quarterly update, Titan said demand was robust as consumer businesses grew 36 per cent at standalone level compared with the festive quarter of last year.
Core jewellery business saw a 37 per cent growth while watches and eyewear segment delivered growth of 28 per cent and 30 per cent, respectively.
Key subsidiary Caratlane registered a strong growth of 64 per cent, it said.
“With strong operating leverage, OPM is expected to expand by 150 bps on a YoY basis to 12.6 per cent. Overall the company is expected to post strong performance in Q3. However, emergence of third wave of Covid-19 would act as a key risk to the near term performance affected by any lockdown imposed by various states and postponement of wedding season,” Edelweiss said.
Sharekhan said it would review earnings estimates once Q3 results are out. It values the stock at 80.9 times FY23 and 65.4 times FY24 earnings and has a target of Rs 2,900 on Titan.
