Titan shares tank 2% post Q3 earnings; here's what brokerages say

Shares of Titan Company Limited tanked 2 per cent to hit an intraday low of Rs 2,430 on BSE after the company posted its earnings for the quarter ended December 2021.
 
Titan Company Ltd reported a 135 per cent year-on-year rise in its net profit for the quarter ended December 2021 at Rs 987 crore. Revenue from operations grew 36 per cent to Rs 9,381 crore, while total income rose 31 per cent to Rs 9,570 crore.
 
The stock opened higher at Rs 2,516.35 against the previous close of Rs 2,475.45 but failed to hold the early gains. With a market capitalisation of Rs 2,20,570 crore, the shares stand higher than 5-day, 50-day, 100-day and 200-day moving averages but lower than 20 day moving averages.
 
According to HDFC Securities, the top line was better than expected because of inventory gains from rising diamond prices, normalising bullion sales in jewellery and a better product mix in non-jewelry segments.
 
"Our FY23/24 EPS estimates only marginally change (2-3%). We maintain our SELL rating, with a DCF-based target price of Rs 1,850 per share (earlier Rs 1,800 per share), implying 50x FY24 P/E," the brokerage firm said.
 
Prabhudas Lilladher believes Titan is well placed to capitalise on long-term growth opportunities led by jewellery share gains due to network expansion, regional thrust and hallmarking benefit Omni-channel strategy across jewellery, watches and eyewear, new growth drivers like Caratlane, TitanEye, Taneira and entry into high growth segments like smart watches, over the head headphones and Truly Wireless earphones.
 
"We estimate23.5% PAT CAGR over FY22-24 and remain positive given the structural story on account of market share gains, strong balance sheet, franchisee based model and strong brand. Reiterate BUY with DCF based target price of Rs 2,833 (Rs 2,915 earlier)," it said in its research report.
 
As of December 31, the company has 2,064 stores in 323 towns. It added 149 net stores during April-December 2021 period.
 
Commenting on the results, Titan MD CK Venkataraman said, "The festive purchases in the quarter have driven Titan's strong growth in all businesses of the company and the quarter has turned out to be one of the best quarters in terms of growth and profitability...While the onset of Covid-19 wave 3 has slowed down the strong momentum, the company is hopeful of ending the year on a positive note."