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Titan sees strong recovery in demand in Q2FY22, what should investors do now? –

Titan Company share price touched a 52-week high of Rs 2,314.30, rising nearly 8 percent in the early trade on October 7 after the Tata group firm reported a strong recovery in demand in the second quarter of the financial year 2021-22.

Titan Company said its jewellery business grew by 78 percent in Q2FY22 YoY and added 13 stores during the quarter.

The watches and wearables segment registered 73 percent growth and the eye-wear business was up by 74 percent YoY.

There was a strong recovery in demand after the second coronavirus wave across consumer businesses, with sales moving swiftly above or close to pre-pandemic levels in most of the divisions, the company said in a press release.

Most of the stores were fully operational, barring select towns which still had some local restrictions. Overall store operation days exceeded 90 percent for the quarter, it added.

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Here is what brokerages have to say about the stock and the company after Q2FY22 business performance:

JPMorgan | Rating: Neutral | Target: Raised to Rs 2,320 from Rs 2,000

The research house has raised the target price after solid Q2 revenue beat drove EPS upgrades and supported premium valuation.

The revenue growth was ahead of expectations, driving 6 percent EPS upgrade over FY22-23.

UBS | Rating: Neutral | Target: Rs 2,100

The improved retail operations and pent-up demand resulted in strong jewellery growth. UBS expects limited upside to Q2 margin given the inferior mix.

In the second quarter, golden harvest scheme enrolments surpassed pre-pandemic levels.

Credit Suisse | Rating: Neutral | Target: Raised to Rs 2,150

Credit Suisse raised the target price after the growth in jewellery business was significantly ahead of the expectations, likely helped by the postponed demand from Q1.

Credit Suisse increased FY22/23/24 earnings estimates by 8 percent/5 percent/5 percent.

CIMB | Rating: Upgrade to add | Target: Rs 2,362

Broking house CIMB has upgraded the rating to “hold” on robust recovery and structural growth drivers.

It estimates consolidated sales growth for the quarter at 64 percent YoY, while jewellery segment reported strong sales growth of 78 percent in Q2.

Prabhudas Lilladher | Rating: Upgrade to buy from accumulate | Target: Rs 2555

The brokerage has said the worst is over, as more than 90 percent of the stores are operational and rising vaccination is improving consumer confidence and footfalls.

Growth in watches, eyewear and accessories has shown faster recovery, a big positive given the low base in coming quarters.

Motilal Oswal | Rating: Buy | Target: Rs 2460

Titan’s strong sales growth (78 percent YoY excluding bullion sales) in the jewellery segment is an outstanding performance. Even on a two-year basis, it has delivered 32 percent sales CAGR, which is phenomenal.

Margin would be impacted in 2QFY22 due to a lower contribution of studded jewellery, however, the strong topline growth would still drive sharp EBITDA growth.

At 0916 hours, Titan Company was quoting at Rs 2,291.55, up Rs 144.75, or 6.74 percent on the BSE.

Disclaimer: The above report is compiled from information available on public platforms. advises users to check with certified experts before taking any investment decisions.