Titan’s share price has jumped about 25 per cent in the last one year, significantly outperforming the benchmark Sensex; Should you invest?
Titan Company shares slipped as much as 3.15 per cent to Rs 2,884.55 apiece on the BSE on Thursday’s intra-day trade. This comes a day after its fiscal first quarter net profit fell 4.3 per cent on-year, as weak margins offset revenue growth. Earlier yesterday, Titan reported a net profit of Rs 756 crore for Q1FY24; this was on revenue from operations of Rs 11,897 crore – up 26 per cent on-year. Brokerages offered mixed reviews on the scrip following its quarterly results.
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Titan’s share price has jumped about 25 per cent in the last one year, significantly outperforming the benchmark Sensex which has gained about 13 per cent in the same period.
The stock hit its 52-week high of ₹3,211.10 on July 7 this year and its 52-week low of ₹2,268.90 on February 2 this year on BSE.
Most brokerage firms retained their earlier views on the stock after Titan’s June quarter numbers.
Brokerage firm Motilal Oswal Financial Services maintained its buy rating on the stock with a target price of ₹3,325.
“Titan’s brand-building initiatives across segments, increasing customer base, store expansions and development in international markets continued to be impressive. There are no material changes to our FY24 and FY25 forecasts,” said Motilal Oswal.
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“Its positive growth outlook along with favourable industry trends and a strong balance sheet make it a compelling option in the discretionary sector. Titan has an impressive track record of outperforming its peers as well as exceptional long-term growth potential, all of which justify its premium valuations,” said Motilal Oswal.
Motilal Pointed out that the gradual recovery in the studded ratio is expected to support improved gross margin in the future.
Analysts at Ekmay said: “In our view, Street’s margin estimate will now gravitate to the lower end of the guided band on Q1 disappointment and high competitive intensity/hallmarking. While we stay confident on market share gains, on TTAN’s cross-functional strengths and incremental growth potential from International, Taneira and Handbags, we retain HOLD on near-term margin uncertainty. We reduce our Target Price by 5% to Rs 3,000 (54x Sep-25E EPS) on a 6-8% earnings cut and 3M rollover.”
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Nuvama said: “While Titan’s jewellery margins have been volatile quarter to quarter, it achieved a 13% average over FY19–23 (ex-FY21). We are trimming margins, but keeping it in the lower end of guidance (12.5%); our FY24 EPS hence edges down only 4%. We value Titan at 60x Q1FY26E PE (5Y average) with a Target Price of Rs 3,425. Titan remains among our top picks.”
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