Titan Company share price touched a 52-week high of Rs 2,687.30, rising over 3 percent in the early trade on January 7 after the company reported healthy revenue growth in the third quarter ending December 2021.
Titan company witnessed strong demand and clocked 36% growth in its revenues through consumer businesses for the festive quarter last year, the company said in its press release.
In the Q3FY22 (October-December), the company’s Jewellery business revenue rose 37 percent, while Watches & Wearables revenue saw a jump of 28%, YoY.
Its Eye Wear segment revenue jumped by 27 percent, however, other businesses revenue rose 44 percent, YoY.
The company has added 89 new stores across the segments in October-December quarter, with total stores stood at 1,935.
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Here is what brokerages have to say about the stock and the company post September quarter earnings:
Foreign broking house Credit Suisse has kept neutral rating on the stock and raised the target price to Rs 2,700 from Rs 2,500 per share.
The Q3FFY22 saw another large beat from the jewellery business, while there was good traction in watches and eyewear; raises FY22/23/24e earnings by 7%.
Broking house CLSA has maintained sell call with target at Rs 2,200 per share
The company has reported 36% organic topline growth, led by 37% growth in the jewellery segment.
October & November 2021 saw robust sales in jewellery aided by the festive period, while steady ticket size, improved walk-ins with better conversion aided jewellery sales.
Titan continues to deliver a solid performance, led by strong sales growth in the Jewelry segment (37% YoY, excluding bullion sales). Notably, it has achieved this on a base of 22% YoY growth in the segment during the base quarter. Even on a two-year basis, it has delivered a 26% sales CAGR, which is commendable.
The operating margin is likely to improve YoY in 3QFY22, led by a higher YoY contribution from the Studded Jewelry business. The strong topline growth would also drive EBITDA growth.
The structural investment case for Titan remains extremely strong. We maintain our buy rating, with target price of Rs 2,950 per share at 70x Mar’24E EPS.
We are increasing FY22/23/24 EPS estimates by 10%, 5.8% and 6.5% to Rs25.6/33.4/42.2 and increase DCF based target price to Rs2915 (Rs2651 earlier). This follows stronger than expected 3Q jewellery sales growth even as watch and Eyewear sales are slightly lower than our expectations.
We believe structural story remains intact led by market share gains, strong balance sheet, franchisee based model and Omni Channel across product segments. Reiterate Buy.
At 09:19 hrs, Titan Company was quoting at Rs 2,684.00, up Rs 87.25, or 3.36 percent on the BSE.
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