Buy Titan Company, target Rs 1,036: Edelweiss Financial Services

Edelweiss Financial Services has a buy call on Titan Company with a target price of Rs 1,036.

The current market price of Titan Company is Rs 915.

Time period given by the brokerage is one year when Titan Company price can reach the defined target.


View of Edelweiss on the company:
Titan’s jewellery division was soft in Q1FY19 on expected lines. However, July started with a bang—comparable sales growth of 40 per cent plus—and management is confident of clocking 25 per cent plus YoY growth over balance 9 months.

The Skinn (perfumes) business is doing well and Titan is targeting doubling of sales led by the entry in new categories (body mist) and expansion of distribution reach. Entry in the saree business via Taneira with 2 pilot stores in Bengaluru has exceeded Titan’s expectations; planning to test waters in Mumbai and Delhi.

In watches, new launches with smart features—Fastrack Reflex (smart band)—are on the anvil. Focus on the eyewear division will be on adding new customers and the company is on target to achieve 25 per cent growth in FY19.

We believe Titan has the ability to create significant value with its large distribution presence, strong brand, designing skills and proven execution track record. Witha robust balance sheet, strong brand equity and professional management team in place we remain bullish on Titan.

Risks: Gold price volatility, regulatory hurdles and seasonality in business.