Titan is well placed to capitalise on LT growth led by benefit of hallmarking, omni-channel strategy across jewellery, watches and eyewear and new growth drivers like Caratlane, Titan Eye+, Taneira, and entry into high growth segments like headphones and Truly Wireless earphones, highlighted brokerage Prabhudas Lilladher.
The brokerage has a Buy rating on Titan shares with a target price of ₹2,754 and expects jewellery business to sustain strong margins due to inventory gains in diamond in 4Q and 1Q23 as well.
“4Q sales were impacted 3rd wave impact in January, higher gold price impact on volumes in February and impact of geopolitical uncertainty in March. However, excluding the one of impact from large order in base quarter and exceptionally strong 4Q21 sales, 28% CAGR over 2 years for jewellery sales remains positive,” analysts at Prabhudas Lilladher added.
Titan’s jewellery segment ended the fourth quarter on a flat note and business saw subdued activity in top cities due to the Omicron wave. The segment declined 4% year-on-year, with a net addition of 16 new stores. The watches and wearables segment grew 12% YoY and 34 new stores were added during the March quarter.
Taking a deep-dive into Titan’s subsidiary CaratLane, Jefferies said that with strong revenue growth, the company has improved its unit economics significantly. In fact, CaratLane achieved Ebitda profitability in FY20 and was also profitable at net earning, with positive free cash in FY21.
“Titan is a structural growth story, but given the lofty valuations, we rate the stock Hold,” the note stated. Jefferies Hold rating on the Tata Group stock comes with a target price of ₹2,600.
As per the BSE shareholding pattern, ace investor Rakesh Jhunjhunwala holds 4.02% stake in Titan whereas his wife Rekha Jhunjhunwala has 1.07% equity as of December 2021.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
the App to get 14 days of unlimited access to Mint Premium absolutely free!