Titan Shares Rally Over 5% After Strong Q2 Results; Should you Buy, Sell or Hold?

Titan Share Price Today: Shares of Titan Ltd rallied more 5 per cent to Rs 2,744 apiece on the BSE in Friday’s opening deals after the company said its overall sales grew 18 per cent year-on-year (YoY) in the September quarter (Q2 FY23) and added 105 stores in its retail network in the second quarter of the current fiscal.

About the outlook for the festive season, the company said it continues to be “optimistic and is visible in positive consumer sentiment” across categories. During the September quarter, Titan’s jewellery division, which contributes around 85 per cent of its revenue, grew “18 per cent YoY on a high base of Q2FY22 that had elements of pent-up demand and spillover purchases of a Covid-disrupted Q1 FY22″.

The product-mix in the jewellery division improved compared to last year but continued to be below pre-pandemic levels. ” Walk-ins grew in low double digits YoY with steady buyer conversions,” the company said.

Its Watches & Wearables grew 20 per cent YoY, clocking its highest quarterly revenue while the EyeCare business saw 7 per cent YoY growth.

The overall sales of the company during the quarter grew by 18 per cent. That apart, it added 105 stores during the three-month period, it said.

Should you Buy, Sell or Hold?

Motilal Oswal said earnings growth visibility for Titan remains strong. It has compounded earnings by about 20 percent for an elongated period of time, the broker underlined, adding the structural investment case for the stock is intact.

“In the Jewelry industry, which is organizing at a rapid space, it is clearly at the vanguard in terms of growth among organized players,” Motilal Oswal said. “Its runway for growth is long, with a market share of ~6 percent. Unlike other high-growth categories, the competitive intensity from organized and unorganized peers in Jewelry is considerably weaker.”

The broker maintained a ‘buy’ rating with a target of Rs 2,970.

Morgan Stanley maintained its ‘overweight’ rating on the stock with a target of Rs 2,902. It said initial Q2 trends are “strong”. Improving studded mix, positive sentiments and a good festive season outlook are key positives.

About Titan

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.

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.

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