Shares of Titan surged more than 6% to ₹2,133 apiece on the BSE in Thursday’s early deals, hitting one month-high, after the company on Wednesday shared its Q1 business updated which showed that its sales in the April-June quarter were up nearly three-fold on a year-on-year (YoY).
Its jewellery division, which contributes around 85% of its revenue, reported 207% growth and added 19 new stores during the quarter, taking the total count to 463.
“Titan growth strategy is playing out in Jewellery with aggressive store expansion (19 in 1Q), increased focus on wedding segment, focus on lighter Jewellery and designs and campaigns to cater to regional tastes and preferences,” said brokerage Prabhudas Lilladher which has Buy rating on Titan shares with a target price of ₹2,520.
The brokerage house believes that the company’s new businesses like Wearables, Taneria (Distribution and product range led), Carat lane will continue to gain traction.
Titan’s watches & wearables division achieved its highest ever quarterly revenue in Q1FY23 growing 158% YoY with healthy growth witnessed across all brands and products.
“Titan remains our top pick in the largecap Consumption space in India, with strong earnings growth visibility and compounding by ~20% for an elongated period of time,” said another brokerage Motilal Oswal.
In the Jewelry industry, which is organizing at a rapid space, Titan is clearly at the vanguard among organized players in leading this growth. Its runway for growth is long, with a market share of around 6%.
“Unlike other high-growth categories, the competitive intensity from organized and unorganized peers in Jewelry is considerably weaker. The structural investment case for Titan is intact,” it added. Motilal Oswal has also maintained its Buy rating on the Tata Group stock with a target price of ₹2,900 per share.
Titan was set up in 1984 as a joint venture between the Tata Group and the Tamil Nadu state government. While the Tata Group owns a 25% stake, the state government owns a 27.88% stake in the company.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
