Shares of Titan Company Ltd were in the green after the company reported robust results for the fourth quarter of FY23 and for the entire year. Its shares were quoting at ₹ 2729.95 apiece, up 2.31% at 11:35 AM on the National Stock Exchange (NSE).
Titan, a Tata group company is one of the most respected consumer discretionary companies in India. It has established leadership positions in the watches, jewellery and eyewear categories led by its trusted brands and differentiated customer experience. It was founded in 1984 as a joint venture between TATA Group and Tamilnadu Industrial Development Corporation (TIDCO).
On a consolidated basis, Titan reported a 40% jump in its quarterly net profit on a year-on-year basis to ₹ 736 crores in Q4FY23 (January to March 2023), as compared to ₹ 527 crores in Q4FY22 (January to March 2022). Its total income increased by 26% to ₹ 9419 crores in Q4FY23 as compared to ₹ 7497 crores in Q4FY22.
For the entire financial year (FY23), its profit after tax increased by 49% to ₹ 3,274 crores, against ₹ 2,198 crores reported in FY22. The company posted a total income of ₹ 38,675 crores in FY23, against ₹ 27,988 crores reported in FY22, indicating an increase of 49%.
The company has declared a dividend of ₹ 10.00 per share, and it will be dispatched on or after the seventh day from the conclusion of the 39th Annual General Meeting subject to approval of the shareholders of the Company.
Titan said that higher-priced brands continued to see better growth, and wedding segment growth recovered and inched marginally ahead of overall retail sales growth. It added 12 new stores of its brand Tanishq ((including 1 in Silicon Oasis, Dubai), 18 stores of Mia by Tanishq and 1 store in Zoya during the latest quarter.
As far as the watches and wearables segment is concerned, it achieved a product sales milestone of 1 million+ smartwatches sold for FY23. Moreover, International Data Corporation (IDC) rated Titan as one of the Top 5 Smartwatch companies by market share in India. It added 52 new stores, including 21 additions around the world.
Its eye care segment witnessed a volume-led overall growth, but the average selling price too saw a marginal improvement YoY (in low single digits). It added 38 new stores in this division.
Motilal Oswal has a buy rating on the stock with a price target of ₹ 3080.00. This translates to an upside of 12.82% as compared to the company’s share price.
Goldman Sachs has maintained a buy rating on the stock with a price target of ₹ 3175.00. This implies an upside of 16.30% as compared to its share price.
Titan is a blue chip stock with a market capitalization of ₹ 2,37,074 crores. It has a high return on equity of 30.73% and an ideal debt-to-equity ratio of 0.79. Its shares were trading at a price-to-earnings ratio (P/E) of 72.96, which is significantly higher than the industry P/E of 20.90, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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