Shares of Titan Company rose nearly 2 per cent on Monday to their fresh 52-week high of Rs 3,776.85 on the NSE after the consumer discretionary major reported a 22 per cent year-on-year (YoY) jump in its standalone revenue for the quarter ended December 2023.
Titan’s store expansion remained strong in the quarter, and growth for other segments too was impressive, said Citi analysts.
The maker of jewellery and watches added 90 outlets in the October-December period, taking the group’s retail presence to 2,949 stores. Its watches and wearables business grew 21 percent on-year.
The growth in gold (plain) and coins in this festive quarter exceeded the studded sales growth driven by higher consumer interest in gold despite elevated prices and volatility, said Titan.
Further, the EyeCare division revenue declined by 3 per cent YoY. In emerging businesses, Taneira’s revenue grew 61 per cent YoY. The brand opened 11 new stores during the quarter comprising of a store each in the new cities of Rajkot, Surat, Bhagalpur, and Chandigarh. The Fragrances & Fashion Accessories revenue declined by 9 per cent YoY. Within businesses, revenue in Fragrances declined by 8 per cent YoY whereas Fashion Accessories saw a decline of 10 per cent YoY.
Meanwhile, the company’s market capitalisation crossed the Rs 3,00,000 crore mark for the first time on November 23. Notably, the shares finished the calendar year 2023 with an impressive rally of 41.50 per cent.
Following the company’s Q3 business updates, HSBC reiterated its buy call on the stock and raised the target price to Rs 4,200 from Rs 3,900 it gave earlier.
In a note, the brokerage acknowledged strong YoY Q3 jewellery sales at 23 per cent, ahead of consensus expectations. Other divisions did well except the EyeCare division, it said. Strong and consistent results reinforce Titan’s structural attractiveness, HSBC commented.
In the release, Morgan Stanley stated that all its businesses, barring eyewear, saw year-on-year (YoY) growth, while as a whole, it logged 22 per cent growth. The company’s omni-channel jewellery brand Caratlane, however, logged 31 per cent YoY growth.
After the update, the brokerage firm has given an equal weight rating to the stock and suggested a target of Rs 3,190, a downside of 14 per cent from the last closing price of Rs 3,710. This is despite the company’s positive growth. Foreign brokerage mentioned that the company witnessed strong jewellery demand trends with 20 per cent plus growth for the fourth quarter in a row, vs general sluggishness in discretionary demand. Also, it reiterated that the company’s gold exchange programs are working out favourably.
The technical indicator RSI of the stock is placed at 68 levels, which is a neutral state.
The Trendlyne data suggests that the consensus recommendation on the stock from 30 analysts is ‘Hold’ with 13 of them suggesting ‘Strong buy’.
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