Accumulate This Multibagger Tata Group Stock For High Returns As Recommended By Prabhudas Lilladher

Prabhudas Lilladher initiates coverage on Titan Company Limited (TTAN) with positive returns. The brokerages rate the stock of the company Accumulated with a target price of 2,875/share. According to the brokerage, if you Accumulate the stock at the current market price, the stock is likely to give you gains of 16%. Titan Company is a Tata Group's Gem & Jewellery sector company. With a market capitalisation of Rs 2,20,583 crore, it is a large-cap Tata Company.

Stock Outlook & Returns

The stock of Titan Company on NSE last traded at Rs 2,484.65/share. Closed after falling 2.11% from its previous close. The stock's 52 week low as on 1 July 2022 is Rs 1,825.05/share and the 52-week high as on 31 October 2022 is Rs 2,791/share, respectively.

The stock has fallen 3.16% in the last 1 week, 5% in the last 1 month and 9% in the last 3 months, respectively. It has given 3,42% negative return in the past 1 year. However, the stock has given multibagger returns in the past 3 and 5 years. It gave around 113.56% in 3 years and 166.32% in 5 years, respectively.

3QFY23 reports robust sales on high base

Jewelry revenues grew by 11% YoY (ex-bullion sales), led by healthy new buyer growth in the festive period, higher value purchases in the studded category, and unique new collections. Studded saw higher sales vs plain gold jewelry, while Wedding sales grew in-line with overall sales. Tanishq opened its first international store in New Jersey, USA in Dec'22, taking its international presence to 6 stores across Dubai, Abu Dhabi and USA. Added 22 stores (net) during 3Q23, taking the store count to 510.

Watches & Wearables revenues grew by 14% YoY led by strong traction (3x+ sales) in the wearables segment. Retail store transformation which offers a wider choice of premium brands helped to power growth for the division. Added 48 stores (net) during 3Q23, taking the store count to 953.

Eyewear revenues grew by 10% YoY with in-line sales from Titan Eye Plus (TEP) stores and Trade & Distribution channels. Added 36 stores (net) during 3Q23, taking the store count to 863. Targets 1,000 TEP outlets by FY23.

Fragrances/Fashion Accessories/Indian Dress wear revenues grew at ~50%/~21%/~150% YoY. F&FA growth was led by LFS followed by Trade, which grew ahead of the overall division. Taneira sales growth was driven by new store openings & healthy double digit growth from existing stores with encouraging response during the festive period.

TEAL revenues grew by ~58% YoY with Automation Solutions/Aerospace and Defence growing ~50%/~64% YoY.

Caratlane revenues grew ~50% YoY driven by gifting from Navratri, which continued till Bhai Dooj. Studded growth & mix was higher YoY and contributed ~75% of the business. Added 18 stores (net) during 3Q23, taking the store count to 175.

Steady Performance on a high base, Accumulate For target price of Rs 2,875/share

TTAN has reported 11% growth in Jewelry, 14% in Watches and 10% in Eyecare in a high base quarter. "We estimate EBIDTA and PAT growth of 8.2% and 7.2% YoY. We believe double-digit Jewelry sales growth shows market share gains despite tepid demand led by 1) aggressive store expansion (22 in 3Q) 2) focus on studded and lighter jewelry 3) new ranges in wedding segment and 4) designs & campaigns to cater to regional tastes and preferences. Watches and wearables growth has been led by 3x+ growth in wearable sales, new launches and renovation of 81 WOT stores, which augurs well for coming quarters," the brokerage said.

It added, "We believe new businesses like Wearables, Taneira (Distribution and product range led), Carat lane (50% sales growth YoY) will continue to gain traction. We estimate 18% PAT CAGR over FY23-25 and arrive at a DCF based target price of Rs2875 (largely unchanged -Rs2869). We remain positive, however, expect back ended returns given rich valuations of 49xFY25 EPS. Retain Accumulate."

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.