Titan Company’s share price rose over 3 per cent to touch a 52-week high of Rs 2,687.30 in early trade on January 7 after the company posted a strong earnings growth in the third quarter ended December 2021. . The company said in its press release that Titan Company saw strong demand from the consumer business in the festive quarter of last year and registered a growth of 36 percent in its earnings.
In Q3FY22 (October-December) on a year-on-year basis, the company’s jewelery business saw a growth of 37 per cent in earnings, while Watches & Wearables witnessed a growth of 28%.
Its eye wear segment saw a 27 per cent increase in earnings while other businesses grew 44 per cent. The company added 89 new stores in the segment in the October-December quarter, taking the total number of stores to 1,935.
According to Titan’s Q3 update, there is strong demand in the consumer business, know the views of brokerages
Motilal Oswal’s opinion
Commenting on the stock, Motilal Oswal said that Titan continues to deliver solid performance (37 per cent year-on-year excluding bullion sales) due to strong sales growth in the jewelery segment. Notably, it has achieved 22% year-on-year growth in this segment during the base quarter. It has given a sales CAGR of 26% even on a two year basis, which is commendable.
Operating margins are likely to improve in 3QFY22 due to higher YoY contribution from Jewelery business. Strong topline growth will also drive EBITDA growth.
Structural investments for Titan remain extremely strong. Hence, the stock maintains a buy rating with a target of Rs 2,950 per share.
Know the opinion of brokerage houses on Godrej Consumer and SRF
Opinion of Prabhudas Lilladher
Commenting on this, Prabhudas Lilladher said that we are raising the EPS estimate for FY 22/23/24 by 10%, 5.8% and 6.5% to Rs 25.6/33.4/42.2 and increasing the DCF based target price to Rs 2915 ( 2651 earlier). This is a stronger than expected growth in jewelery sales in Q3 although watch and eyewear sales are slightly below our expectations.
Nevertheless, we believe that the structural story remains intact, driven by growth in market share, strong balance sheet, franchise-based model and omni-channel product segment. So you should buy it again.
At 09:19 am today, Titan Company’s stock was trading Rs 87.25 or 3.36 per cent higher at Rs 2,684.00 on the BSE.
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