Buy Titan Company, target price Rs 2910: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on Titan Company with a target price of Rs 2910. The current market price of Titan Company is Rs 2508.

Titan Company, incorporated in the year 1984, is a Large Cap company (having a market cap of Rs 219895.75 Crore) operating in Gems and Jewellery sector.

Titan Company key Products/Revenue Segments include Jewellery, Watches, Precious & Semi Precious Stones, Eyewear, Others, Other Operating Revenue, Scrap, Other Services for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 9224.00 Crore, down -2.77 % from last quarter Total Income of Rs 9487.00 Crore and up 22.20 % from last year same quarter Total Income of Rs 7548.00 Crore. Company has reported net profit after tax of Rs 835.00 Crore in latest quarter.

The company’s top management includes Mr.S Krishnan, Mr.Bhaskar Bhat, Mr.Sandeep Singhal, Ms.Sindhu Gangadharan, Dr.Mohanasankar Sivapraksam, Mr.Pradyumna Vyas, Mr.B Santhanam, Mr.Ashwani Puri, Mr.C K Venkataraman, Mr.N N Tata, Ms.Jayashree Muralidharan. Company has B S R & Co. LLP as its auditors. As on 30-09-2022, the company has a total of 89 Crore shares outstanding.

Investment Rationale
In the Jewellery industry, which is seeing a wave of formalization, the stock is clearly at the vanguard among organized players in leading this growth. Its runway for growth is long, with a market share of less than 10%. Unlike other high growth categories, the competitive intensity from organized and unorganized peers in the segment is considerably weaker.

Aside of the brokerage's expectation of possibly slower growth in 3QFY23 on a very high base in the jewellery business, there are no concerns beyond that, especially with the geopolitical situation stabilizing. Expensive valuations in the near term will be burnished by its rapid pace of growth. The brokerage maintain its Buy rating with a TP of Rs 2,910 (60x Sep’24 EPS).

Promoter/FII Holdings
Promoters held 52.9 per cent stake in the company as of 30-Sep-2022, while FIIs owned 16.77 per cent, DIIs 11.53 per cent.