ICICI Direct has given Buy recommendation for Titan Company with a target price of Rs. 1830 in its research report issued on Feb 11, 2021

ICICI Direct’s research report on Titan Company

Titan is among few discretionary companies in our coverage to have reverted back to heathy sales growth. Key takeaways from Q3FY21 results: a) jewellery division posted healthy sales growth of 16% YoY with fall in grammage arrested to 14% vs. 31% decline in Q2FY21, b) demand for gold coins continues to be on higher end YoY but share QoQ falling (Q3FY21: 8%, Q3FY20: 5%, Q2FY21: 14%), c) share of studded ratio on uptrend with absolute growth of 9% YoY in Q3FY21, with wedding jewellery also seeing strong growth of 10% YoY d) watches division showed sharp improvement QoQ but still below pre-Covid levels (~88%), e) increased its ad expenditure by 72% QoQ to Rs 105 crore but still below its run-rate of Rs 150-160 crore, f) despite gross margins declining 300 bps YoY, EBITDA margins contracted mere 50 bps YoY to 11% due to stringent cost control measures. Overall 12% sales growth in Q3FY21 is ahead of management’s internal target of achieving normalcy by Q4FY21E. Revenue trajectory accelerated further in January with jewellery division seeing 28% YoY growth driven by 16% growth in studded ratio. Robust performance in challenging times reaffirms our thesis of long term market share gains for Titan.


sustained focus on market share gains and better earnings visibility prompts us to upgrade from HOLD to BUY with a revised target price of Rs 1830 (60x FY23E EPS, previous TP: Rs 1660).