Sharekhan has given Buy recommendation for Titan Company with a target price of Rs. 2900 in its research report issued on May 03, 2022
Sharekhan’s research report on Titan Company
Titan’s Q4FY2022 performance was affected by multiple one-offs at the revenue and profitability level, which resulted in lower EBITDA margin of 10.2% versus ours as well as street’s expectation of 13-14%. Excluding one-off, EBITDA margin came at 11.2%. Consolidated revenue grew by 4.0% y-o-y in Q4 (excluding bullion revenues stood flat). The muted performance was because of lower sales in January 2022, affected by Omicron; volatility in gold prices; and global concerns affecting consumer sentiments. April witnessed good recovery in the jewellery business. Higher sales during the auspicious days, postponement of the wedding season, and market share gains will help the jewellery business to achieve double-digit growth in FY2023. Business margins will be at 12-13%. The stock is currently trading at 73.4x/57.4x its FY2023E/FY2024E EPS.
Titan is one of our top picks in the discretionary space from a long-term view. We maintain Buy with an unchanged PT of Rs. 2,900.