Titan Shares Surge On Expansion Plans, Stock Zooms 40% in a Year; Should you Invest?

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Titan Share Price Today:  Titan shares in early trade today rallied by nearly to 3 per cent to the day’s high price of Rs. 2540 apiece on the NSE as the Tata Group‘s jewellery company mulls expansion plan in the US. In the previous session, the Tata group watch and jewellery entity closed at Rs. 2466.45 per share. The stock was trading at its highest level since April 6, 2022. It hit a 52-week high of Rs 2,767.55 on March 21, 2022.

As per reports, Titan is planning to take its jewellery brand Tanishq to the US and other West Asian markets as part of its long- term strategy to tap into the demand from large Indian diaspora and Non-Indian Resident (NRIs) communities. On the domestic front the company expects the demand to be driven ensuing festive season with consolidated YoY revenue growth of around 15-20 per cent.

Titan expects its sales to be higher by 15-20 per cent this festive season compared to last year, Venkataraman said during the launch of its initiative “Titan Shaurya”.

This will be the first festive quarter without Covid-19-related restrictions since 2019. The “Titan Shaurya” initiative has been launched to make all Titan products across all brands accessible to Indian armed forces personnel. “The upcoming festive season is expected to be very good. In fact, I’ve been told that the overall industry is also looking towards an exciting quarter,” Venkataraman said.

The company expects the growth momentum to continue for a long time in the eyewear business. “The eyewear category is limitless and our market share is low. So the growth momentum is going to continue for a very long time,” Venkataraman added further.

Share Price History

Meanwhile, in the past one month, Titan has outperformed the market by surging 11 per cent, as compared to 7 per cent rise in the S&P BSE Sensex. However, in the past six months, the stock has underperformed by gaining 3 per cent, against 6 per cent rally in the benchmark index. On a YTD basis, the stock has remained more or less static, while its 3-year returns are at a good 129%. Late Rakesh Jhunjhunwala had a sizeable stake in the firm to the tune of 3.98% as of June 30, 2022.

Should you Buy?

Titan began FY23 on a strong note with revenues (excluding bullion sales) growing by 3.0x to Rs 8,975 crore (including bullion 2.7x to Rs 9,443 crore). On a 3-year CAGR basis revenues grew by 20 per cent YoY with jewellery sales growing by 23 per cent CAGR in the same period.

Sharekhan in its latest report on the stock has maintained a ‘Buy’ for a target price of Rs. 2900. As for its view on the scrip, Sharekhan said, “Titan is aiming to grow its revenue at CAGR of over 20 per cent over FY2022-27 on back of its ambitious growth plan in the medium term. This along with consistent improvement in margins will help cash flows improve strongly in the coming years. FY2023 will be a strong year for the company on back of low base in the core businesses. Stock is currently trading at 67.9x and 53.7x its FY2023E and FY024E earnings. The company’s strong growth outlook, industry tailwinds in the medium term and strong balance sheet makes it a best play in the retail space. Hence we maintain our Buy recommendation on the stock with an unchanged price target of Rs. 2900”

ICICI Direct is bullish on the prospects of the company and in its report says that “Tanishq had opened its first international store in November 2020 in Dubai and currently has four stores at international locations. The company is planning to open 20-30 stores in the next 2-3 years in North America and West Asia which would enable it to serve the vast diaspora of people of Indian origin residing in these international locations. On the domestic retail front, the company is expecting a strong festive season and is planning to adopt a combination of product innovations, new launches and marketing investments besides promotional offers to capture the expected demand.

The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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