Jhunjhunwala’s favorite Titan stock tank; Experts See 20% Gain, Should You Buy?

Rakesh Jhunjhunwala Portfolio Stocks: Titan Company’s stock price slipped in early trade on April 7, a day after the company’s fourth-quarter trading data came out. The stock opened at Rs 2,517, down 1 per cent from the previous close of Rs 2541.25 on the BSE. With a market capitalization of over Rs 2,20,000 crore, the shares are trading higher than the 100-day and 200-day moving averages but lower than the 5-day, 20-day and 50-day moving averages.

Long-term investors have made big gains by investing in this stock as it has gained more than 400 percent in the last five years and nearly 900 percent in the last ten years.

Despite Q4 FY22 disrupted twice, Titan Company ended the quarter on a satisfactory note – first in January due to partial lockdown due to Omicron wave and then in March which adversely impacted consumer sentiments (a) sharp rise and volatility in gold and (b) uncertainty due to a delicate geopolitical situation, the company said in its press release.

“The underlying demand across all of its businesses remains strong, with most segments witnessing year-on-year growth on a very strong Q4 FY21 basis,” the company said.

It said network expansion and operations continue to make good progress in anticipation of an upbeat Q1FY23 which is expected to normalize after a gap of two years of lockdown in the same period.

The company’s jewelery division reported a decline of 4 per cent in revenue on a year-on-year basis. The watch and wearables division saw a growth of 12 per cent in revenue and 5 per cent in the iCare segment. Revenue from other businesses grew 23 percent in the quarter ended March 2022.

Should you buy, hold or sell Titan shares?

Parbhudas Liladher: Buy

Target price: Rs 2,754; up 8 percent

The brokerage firm believes Titan is well-positioned to capitalize on the LT growth led by Hallmarking’s gains; Omni-channel strategy in jewellery, watches and eyewear, and new growth drivers like Caratlane, Titan i+, Tanera. The entry into high growth segments like Headphones and Truly Wireless Earphones is another positive for the Tata group company. “We anticipate 21% PAT CAGR in FY 22-24 and arrive at a DCF based target price of Rs 2,754 (earlier Rs 2832).” It maintains the buy call on the stock and says that although the structural story remains intact, participants expect back-end returns after very high valuations.

Motilal Oswal: Buy

Target price: Rs 2,910; up 15 percent

“A combination of the omicron wave in January ’22, sharp rise in gold prices and the adverse impact of uncertain geopolitical situation in March ’22 declined 4 per cent year-on-year in jewelery sales,” the brokerage house said. I (flat adjusted for B2B orders last year) in 4QFY22 as shared in the quarter-end update.” While gold prices have stabilized at lower levels by the end of the quarter and wedding demand remains very good, with little chance of further disruption from any COVID-wave, there could be some residual impact in 1QFY23E as well, added this. It maintains a ‘Buy’ rating on the stock with a target price of Rs 2,910.

Edelweiss: Buy

Target Price: Rs 3,065, rally 20 per cent

According to Edelweiss Securities, Titan has been among the biggest beneficiaries of the shift from unorganized to organized segment in jewellery. Given the height of its brand, as well as the trust that the name Tata generates, the company has been able to beat other big jewellers. “We expect it to maintain this trend of market share, fueling its multi-decade growth,” it said. Furthermore, Titan is currently only present in around 220 cities, and aims to increase its presence to over 500 in the next five years. “Though the performance is below trend, this is due to one-time factors along with unchanged factors of underlying structural development. We believe any correction in the stock will be a buying opportunity. It will be on the stock with a target price of Rs 3,065. BUY/SO’ rating, which carries the major risk of volatility in the price of gold and decline in market share.

At 12:22 pm, Titan Company was bidding lower by Rs 60.05 or 2.37 per cent at Rs 2,479.60 on the NSE.

Disclaimer:Disclaimer: The views and investment tips of 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 decision.

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