Navratri Special: Titan Company a long-term buy for retail investors; sees 10% upside

Navratri is already here, and we know how important and auspicious the next few days are with festivities across India. Religare Broking will share a fresh stock idea on each day of Navratri for long-term investors.

Day 6: Titan Company Ltd
Target Rs 2,877
LTP Rs 2,606

Upside 10%

Titan Company was incorporated in 1984, as a joint venture between Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO).

The company has come a long way from one-product category to housing over 16 brands across multiple categories in 2,000+ retail stores.

It has acquired leading positions in the jewellery, watches and eyecare categories, and has also diversified into wearables, Indian dress wear and fragrances & fashion accessories.

Titan operates in India’s jewellery industry under its flagship brand Tanishq, India’s largest jewellery retailer.

In addition, it has multiple brands in the jewellery segment to meet different consumer aspirations, including Zoya, a luxury brand; Mia by Tanishq, which offers contemporary jewellery, and CaratLane, an omnichannel brand for modern jewellery at affordable rates.

This segment has been the primary growth driver for Titan, having registered 13.8 per cent CAGR over FY12-22 and contributing 88 per cent to the company’s consolidated revenues.

Given the fact that Titan has a market share of 4% in the Rs 4-lakh crore market, there’s a scope for it to increase this to a sizeable share in the future.

Moreover, Titan has been the biggest beneficiary of the economy’s continued formalisation. We believe the trend is likely to continue and Titan would continue to outperform the industry given its strong brand presence, wide distribution network and continued focus on product innovation.

Moreover, its strong financial track record, robust return ratios, and strong brand equity make it one of our preferred picks in the sector.

On the financials, Religare Broking expect Titan’s Revenue/EBITDA/PAT to grow at 16.2%/26.8%/32%, respectively, over FY22-24E. The brokerage firm recommends a ‘buy’ on the stock with a target price of Rs. 2,977.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)