Prabhudas Lilladher has given Accumulate recommendation for Titan Company with a target price of Rs. 1869 in its research report issued on Jul 07, 2021
Prabhudas Lilladher’s research report on Titan Company
We are cutting FY22 and FY23 EPS estimates of TTAN by 21.3% and 0.8% as 2 nd wave of covid has impacted the recovery. June21 has seen strong rebound in jewellery sales although trends vary from state to state and across cities depending upon the covid restriction and consumer sentiments. We have been positively surprised by sharp recovery in watches and Eyewear, unlike last year when they were to recover. We believe this is a transition phase and TTAN seem well placed to capitalise on growth led by 1) benefit of hallmarking with strong brand as organized players in jewellery gain share 2) Omni-channel strategy across jewellery, watches and eyewear and 3) new growth drivers like Caratlane, Titan Eye+, Taneira, and entry into high growth segments like Over the Head headphones and Truly Wireless earphones.
Outlook
We estimate 49.5% PAT CAGR over FY21-23 and retain Accumulate with DCF based target price of Rs1869 (Rs 1663 earlier) as long term structural story remains intact on account of market share gains, strong balance sheet, franchisee based model, strong brand, and strong head start in executing strategies like customer safety and Omni Channel across product segments. Strong 3rd Wave of Covid 19 is a key near term risk to our call. Accumulate.