The shares of Titan Company, a Tata group stock, declined marginally and closed at Rs 2,397 levels. The stock has been on a downward trend and has shed 3 percent in a month and over a six months period, it has declined by 8 percent.
Titan Company Limited, which commenced its operations in 1984, is an Indian company that is mainly involved in the manufacturing of fashion accessories such as jewelry, watches, and eyewear. The company is the largest branded jewelry maker in India, with more than 80% of its total revenues coming from the jewelry segment. As of 2022, Titan has a 6% market share in India’s jewelry market.
Talking about the financials of the company, the revenues, and net profits have shown an increase YoY. Revenues shifted from Rs 9,160 crores in Q2 to Rs 11,600 crores in Q3. Net profits witnessed an upward pattern from Rs 835 crores in Q2 to Rs 910 crores in Q3.
The profitability ratio of the company has been in congruence with the scenario expressed by the above parameters. Returns to the equity holders have increased on a YoY basis from 13.76 percent in FY20-21 to 26.18 percent in FY 21-22. Returns on the capital employed have also shown an increase from 14.66 percent in FY 20-21 to 23.04 percent in FY 21-22.
Prabhudas Lilladher has a ‘Buy’ call on Titan Company with a target price of Rs 2905. The current market price of Titan Company is Rs 2,397 which makes it an upside of around 21%.
The rationale for such targets is pertaining to the opportunities with the company in the near future. The company is well placed to capitalize on long-term growth opportunities led by jewellery share gains due to network expansion, omnichannel strategy across jewellery, watches, and eyewear, new growth drivers like Caratlane, Titan Eye+, Taneira, and entry into high growth segments like wearables such as smart watches, over the head headphones and Truly Wireless earphones.
Written by Amit Madnani
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