Titan Company share price fell over 2 per cent on Thursday, a day after the company reported sluggish growth in its jewellery business in March quarter of FY22 (Q4FY22). The shares of the Tata Group company were quoting at Rs 2,481, down 2.34 per cent on BSE. In comparison, the BSE Sensex was at 59,273, down 300 points or 0.5 per cent. “The plain jewellery category bore the brunt of gold volatility in March 2022 leading to a slight decline for the quarter. Studded sales clocked a high single digit growth, thereby partially cushioning the impact of the plain jewellery category,” said Motilal Oswal Financial Services in its report.
Titan Company Q4 performance
Titan’s Jewellery Division ended the March quarter on a flat note over a strong Q4FY21 base. Business saw subdued activity in top cities due to the Omicron wave in January this year, a very strong resurgence in February, and again a drop in customer purchases in March on the back of sharp rise in gold prices and sentiment impact due to the external gee-political conflict. “While walk-ins saw minor decline, the customer conversions and ticket sizes grew marginally for the quarter compared to the same period last year. Sales from top 8 cities grew in single digits while the rest of India saw a small decline. Though the plain jewellery category bore the brunt of gold volatility in March 2022 leading to a slight decline for the quarter, studded sales clocked in a high single digit growth, thereby partially cushioning the impact,” Titan said in its release.
Stock talk: Should you buy, hold or sell Titan shares?
Motilal Oswal: Buy
Target price: Rs 2,910; Rally 15%
The brokerage house said, “A combination of Omicron wave in Jan’22, a steep gold price increase and the adverse impact of uncertain geopolitical situation in Mar’22 led to a 4% YoY decline in jewellery sales (flat adjusted for B2B order last year) in 4QFY22 as shared in the end-of-quarter update.” While gold prices have stabilized at lower levels by the end of the quarter and wedding demand remains very healthy along with less likelihood of a disruption by any further COVID-wave, there could be some residual impact in 1QFY23E as well, it added. It maintains a ‘Buy’ rating on the stock with a target price of Rs 2,910.
Edelweiss: Buy
Target price: Rs 3,065, Rally 20%
According to Edelweiss Securities, Titan has been among the biggest beneficiaries of the shift from unorganised to organised segment in jewellery. Given its brand heft, as also the trust that the Tata name evokes, the company has managed to outpace other large jewellers. “We expect this trend of market share gains to sustain, driving its multi-decade growth,” it said. Furthermore, Titan is currently only present in around 220 cities, and has a target to extend its presence to 500-plus over the next five years. “While the performance is below trend, it is attributable to one-off factors with the underlying structural growth unchanged. We believe, any correction in the stock will be an opportunity to buy,” the brokerage added. It maintains a ‘BUY/SO’ rating on the stock with a target price of Rs 3,065, with key risk to the upside being Gold price volatility and muted market share gains.
Parbhudas Liladher: Buy
Target price: Rs 2,754; Rally 8%
The brokerage firm believes that Titan is well placed to capitalise on LT growth led by benefit of hallmarking; Omni-channel strategy across jewellery, watches and eyewear, and new growth drivers like Caratlane, Titan Eye+, Taneira. Entry into high growth segments like headphones and Truly Wireless earphones is another positive for the Tata Group company. “We estimate 21% PAT CAGR over FY22-24 and arrive at a DCF based target price of Rs 2,754 (Rs2832 earlier)”. It retains Buy call on the stock saying that although structural story remains intact, participants much expect back ended returns given rich valuations.
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