Brokerages pitch for Titan post Q1; should you move in?

Global brokerages, including CLSA and Citi, gave a thumbs up to Titan after the company on Friday reported a jump in June quarter profit.

The jewellery-to-watch maker registered a 30.81 per cent growth in standalone net profit to Rs 349.17 crore for April-June.

The Tata Group firm had reported a net profit of Rs 266.91 crore in the April quarter a year ago.


CLSA maintained ‘Outperform’ rating on Titan with a target price of Rs 1,050. “Q1 results stood ahead of estimates. There were massive margin gains in watches," it stated.

"All our core businesses have shown a healthy growth in profit, in addition to market share gains... Despite the single-digit revenue growth of our jewellery business in the first quarter, the profits grew by a healthy 16 per cent. The company has put together plans to stimulate demand for all its product categories through innovative advertising campaigns and new product launches in coming quarters," Titan Company MD Bhaskar Bhat said.

The management is positive and maintained its guidance of over 25 per cent in jewellery growth. Sustained pick-up in growth is critical to stock price movement, according to CLSA.

The stock was 1.10 per cent up at Rs 928.40 early Monday while the BSE Sensex rose 169.33 points, or 0.45 per cent, to 37,725.49.

Morgan Stanley also maintained ‘Overweight’ rating on Titan with a target price of Rs 1,080. “Q1 FY19 earnings stood in line with estimates. Key positive for the quarter is the watch business margin and the key disappointment during the quarter was the jewellery business margin,” Morgan Stanley added.