1,000% Dividend: Tata's 40-Year-Old Gems & Jewellery Titan Makes Big Announcement, Stock In Focus; BUY?

Titan Company, a 40-year-old gems and jewellery giant backed by Tata Group, will be in focus on BSE and NSE during trading hours on Monday. Most likely the shares will react to its Q4 update under which the company posted a double-digit revenue growth of 17% YoY. Also, Titan added a total of 86 stores in the quarter. Titan is among the dividend-paying stocks of Tata, and a leader in its segment.

As per the regulatory filing, Titan registered Revenue growth of c.17% YoY in Q4FY24. A total of 86 stores (net) were added in the quarter. The retail network presence stands at 3,035 stores.

On segment-wise performance, Jewellery domestic operations grew c.19% YoY led by both buyers and same-store sales clocking healthy double-digit growths. Growth was similar across gold (plain) and studded segments. Tanishq added a new store in Dubai and Chicago (USA) during the quarter. Of the 27 new store additions (net) in India, 11 stores were added in Tanishq and 16 stores were added in Mia.

Further, the watches and wearables domestic business grew c.7% YoY comprising of c.7% Revenue growth in analog watches and c.2% growth in Wearables. Helios channel housing Titan and International brands grew fastest in the analog portfolio clocking a healthy double-digit growth. 44 new stores were added in the quarter consisting of 10 stores in Titan World, 20 in Helios and 14 in Fastrack respectively.

In the case of EyeCare Division, however, its business declined by c.1 % YoY. Titan Eye+ added a new store in Dubai taking the total count to 4 stores in the GCC region.

In Emerging Businesses, Taneira's Revenue grew c.37% YoY. The brand opened 11 new stores during the quarter comprising of 8 new city additions. The Fragrances & Fashion Accessories Revenue grew by c.12% YoY. Within businesses, Revenue in Fragrances grew by c.9% YoY and Fashion Accessories grew by c.18% YoY.

Also, Caratlane's business grew c.30% YoY. The studded segment grew in line with overall growth. The business added 10 new domestic stores (net) expanding the network presence to 272 stores.

Titan's share price stood at Rs 3,754.85 apiece, down by 0.75% on BSE after market hours of April 5th. Its market cap is around Rs 3,33,350.39 crore. In a year, Titan shares have zoomed by 45% on BSE.

Last year, Titan paid dividends up to 1,000% amounting to Rs 10 per share. Currently, it has a dividend yield of 0.27%.

As per Trendlyne data, the consensus recommendation from 30 analysts for Titan Company Ltd. is BUY. EPS is expected to grow by 11.1% in FY24. Titan's Return on Equity(ROE) for the last financial year was 27.42%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit. Also, the company's Debt to Equity Ratio of 0.63 is less than 1 and healthy. This implies that its assets are financed mainly through equity. However, the company's Price to Earning Ratio is 96.59, higher than its sector PE ratio of 43.98.

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