Prabhudas Lilladher has given Buy recommendation for Titan Company with a target price of Rs. 2554 in its research report issued on Oct 06, 2021
Prabhudas Lilladher’s research report on Titan Company
We are increasing FY22/FY23 EPS estimates by 7.9% and 3.9% to Rs21.7 and Rs31.5 and introduce FY24 EPS estimates at Rs39.2. Our earnings upgrade stems from a strong 78% sales growth in 2Q led by broad based growth across Jewellery, watches and eyewear. We estimate 2Q PAT at Rs6.1bn, a growth of 205%. We note that the reported numbers are far better than our channel checks which suggested industry growth of 25%, suggesting market share gains. We note that We don’t rule out some inventory stocking by Tanishq franchisees ahead of festival season.
We estimate 45% PAT CAGR over FY21-24 and upgrade to BUY (Accumulate earlier) with a DCF based target price of Rs2555 (Rs 1916 earlier) as long term structural story remains intact on account of market share gains, strong balance sheet, franchisee based model and Omni Channel across product segments. Upgrade to Buy.