Titan share price: Sell Titan Company, price target Rs 1750 : HDFC Securities

The securities have a sell call with a target price of Rs 1750. The current market price of . is Rs 2020.65. 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 179004.32 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.

finance

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.

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Investment rationale
Titan’s revenue in Q4FY22 increased by 4% YoY to reach INR 78 billion. Jewelry (excluding bullion) was down 3% YoY (Q4FY22 three-year CAGR: ~17%; online) due to (1) Omicron-induced demand disruption and (2) the gold price volatility. What was more disappointing was underlying jewelry profitability at ~10% (down 90 bps yoy; HSIE: 12%). We suspect Titan’s customer acquisition cost could rise as the gold exchange moves higher into the supply mix during times of uncertain demand/high inflation – a chilling effect on its hard-hitting valuation. EPS estimates for FY23/24 are reduced by 3% each to reflect cost normalization. It maintains the SELL recommendation with an unchanged DCF-based TP of INR 1,750/sh, implying 48x FY24 P/E.

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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