Shares of Titan Company Ltd hit a fresh 52-week high of ₹ 2,841.90 apiece on the National Stock Exchange (NSE), amid a stable business outlook. In the pt week, the Tata Group company gained 6.00%.
Titan posted better-than-expected revenue growth in the January to March quarter of the financial year 2022-23 (Q4FY23), accelerated by strong demand trends in the jewellery and watch segment.
Titan Company is a lifestyle company with 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 the TATA Group and Tamilnadu Industrial Development Corporation (TIDCO).
The company reported a 39.66% jump in its consolidated net profit to ₹ 736.00 crores, for Q4FY23, against ₹ 527.00 crores reported in the corresponding quarter of the previous year (Q4FY22). Its revenue climbed 26.81% to ₹ 9215.00 crores in Q4FY23 from ₹ 7267.00 crores in Q4FY22.
For the entire year (FY23), the company’s net profit rose 48.95% to ₹ 3,274.00 crores, against ₹ 2198.00 crores reported in the previous financial year (FY22). Its revenue from operations came in at ₹ 37924.00 crores in FY23, against ₹ 27417.00 crores in FY22.
Brokerage firm ICICI Securities has reiterated a buy rating on the company’s shares with a revised target price of ₹ 3240.00, on the back of strong earnings visibility and the company’s ability to sustain premium valuations. This translates to an upside of 15.27% as compared to its share price of ₹ 2,810.75 as of 01:14 PM on Tuesday.
ICICI Securities said that Titan’s regionalisation strategy in markets where it had a lower market share than its national average, has led to market share gains. The analysts believe that Titan is a structural growth story and appears to be a key beneficiary of the unorganised to organised shift in the Indian jewellery market.
Meanwhile, rating agency ICRA expects Titan’s revenue to continue to record a healthy YoY growth over the next 2-3 years, due to the formalisation of the jewellery retail industry. It reaffirmed the company’s long-term rating with a stable outlook, indicating that Titan will maintain a comfortable capital structure and healthy coverage metrics.
Titan is a large-cap company with a market capitalization of ₹ 2,49,668 crores, it has a high return on equity of 30.73% and an ideal debt-to-equity ratio of 0.79. The company’s shares were trading at a price-to-earnings ratio (P/E) of 76.84, which is significantly higher than the industry P/E of 21.59, indicating that might be overvalued as compared to its peers, or that investors are willing to pay a higher price for the company’s future earnings.
Written By Simran Bafna
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