The brokerage believes Titan will be better placed than its peers in FY24, though its growth growth will moderate from the highs of FY23

Market share gains to add sheen to Titan. Should you buy?ET CONTRIBUTORS
Titan shares have fallen 10% so far this year on demand slowdown worries, but the potential market share gains will likely act as a key driver of growth for the company, according to JP Morgan.

The brokerage believes though FY24 growth will moderate from the highs of FY23, it will remain among the highest of its peers.

Maintaining an “overweight” stance on the stock, JPMorgan said the spending by its upper income customers has been fairly resilient. It has a target price of Rs 3,000.

On Thursday, Titan stock is trading 2.36% higher at Rs 2,453 apiece on NSE.

Titan has set a target to achieve 20% CAGR revenue growth for the jewellery business and JP Morgan is optimistic that the company would achieve this feat.

The company’s income from jewellery saw 11% growth at Rs 9,518 crore in the third quarter, while the India business rose 9% in the same period, backed by healthy consumer demand during the festive season. EBIT for the segment came in at Rs 1,236 crore, with 13% EBIT margin.

A total of 22 stores (excluding Caratlane) were added during the quarter, taking the total jewellery store count to 510 spread across 247 cities.

The brokerage expects margins to stay stable at 12-12% as drag from rising gold price competitiveness and growing share of exchange should be mitigated by better mix and operating leverage benefits.

The company reported a 4% fall in net profit at Rs 951 crore for the three months ended December. Sales during the quarter rose 11% to Rs 10,444 crore, compared with Rs 9,381 crore in the same quarter last year.

In the wearables segment, JP Morgans sees 10% growth led by extensive new launches, expanding distribution and enhanced marketing. Meanwhile, watch growth is targeted at mid-high teens led by mix improvement and network expansion.

“Titan has a dominant position in the leading lifestyle categories of organized jewelry and watches. Its medium-term growth outlook remains good, supported by various initiatives to drive higher sales of wedding, fashion jewelry, and new customer acquisitions,” it said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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