Titan Share Price: Buy Titan Company, Target Price Rs 2817: Centrum Broking

Centrum Broking has a call to buy on Titan Company with a target price of Rs 2817. The current market price of Titan Company Ltd. is Rs 2202. The period given by the analyst is one year when the price of Titan Company Ltd. can achieve the set goal.

Titan Company Ltd., incorporated in 1984, is a large cap company (having a market capitalization of Rs 196640.20 Crore) operating in the gemstone and jewelry business.

The major products/revenue segments of Titan Company Ltd. include jewelry, watches, gold, eyewear, traded goods, precious and semi-precious stones, other operating income and other services for the year ending March 31, 2021.


For the quarter ended 31-03-2022, the company reported consolidated total revenue of Rs 7872.00 Crore, down -22.01% from last quarter, total revenue of Rs 10094.00 Crore and up 4.25% compared to the same quarter last year. Total income of Rs 7551.00 Crore. The company reported a net profit after tax of Rs 527.00 Crore last quarter.

Investment rationale
Titan’s Q4FY22 impression was below estimates; revenue/PAT increased by 4.0%/2.3%, while EBITDA decreased by 2.8%. On a high basis (+71.3%), the jewelry segment grew by 2.5% (including the sale of bullion) but continues to register impressive market share gains, which has led to EBIT margins of 12.7% (affected due to exceptional items). Management alluded, despite Omicron, rising gold prices and consumer expectation and approach, studded revenue was up 7%, but the wedding category was down 9%. GHS enrollment increased by 24%. The watch segment grew by 11.8% with stable volumes. The Eyewear business recorded slower growth at 5.5%, due to the cleaning up of distribution channels. Caratlane increased by 43%. Gross margin at 25.3% (+315bps); EBITDA decreased by 2.8% to 7.9 billion rupees, impacted by exceptional items: VRS (540 million rupees) and ex gratia (820 million rupees) despite inventory gains of 1. 6 billion rupees. APAT at Rs5.8bn (+2.3%). Given the FY22 performance, the brokerage cut profits and retained the buy, with a revised DCF-based TP of Rs 2,817 (implying 69.5x FY24 EPS) .

Promoter/Fii Holdings
The promoters held 52.9% of the company’s capital as of March 31, 2022, while the FIIs held 18.4% and the DIIs 10.21%.

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