Rakesh Jhunjhunwala portfolio: Brokerage says to buy this Tata group stock
Premium- With a market valuation of ₹188,876 crore, Titan Company Limited is a large-cap company that operates in the gem and jewellery industry.
With a market valuation of ₹188,876 crore, Titan Company Limited is a large-cap company that operates in the gem and jewellery industry. Being a TATA product, Titan is the largest and most reputable brand in India for accessories including jewellery, watches, and eyeglasses. When compared to the same period the previous year, Titan Company's first quarter ended in June 2022 (Q1FY23) sales increased by an astounding 205 per cent. Additionally, Titan's 3-year CAGR over Q1FY20 reached 20.5 per cent. As a result, brokerage firm Emkay Global is bullish on the stock and has given it a buy recommendation with a target price of ₹2,530.
Commenting on the performance of the company, Emkay Global has said in a note that excluding bullion sales, Jewelry revenues almost tripled YoY, led by growth in the number of buyers/walk-ins. The avg. ticket size remained stable. On a 3-Yr CAGR basis, growth in the jewelry segment accelerated to 23% in Q1 vs. 18-21% in the previous three quarters. TITAN attributed the strong trends to uninterrupted operations, the regionalization strategy and strong traction during the Akshay Tritya festival in May’22. The studded mix improved slightly from the previous year and was back to pre-Covid levels (~25%) in Q1. Tanishq’s network was expanded by 7 stores, including one in Dubai.
“Watches/Eyewear posted a slower 3-Yr CAGR of 2%/8%, helped by a 6%/12% store count CAGR. Encouragingly, wearables growth quintupled on a low base, and the momentum remains intact in the second half. Store additions, however, have been particularly strong in both Eyewear/Watch segments, with 56/39 new store additions in Q1. The pick-up in store additions is encouraging and in line with Titan’s expansion outlook for these categories," said the research analysts of Emkay Global.
As per the brokerage, TITAN Company’s “Caratlane maintained its strong growth trajectory with a 3-year CAGR of ~55%. Growth has been driven by a ~30% store count CAGR, launch of new merchandise, marketing campaigns and unlocking of markets. Other businesses (Taneira, Fragrances and Accessories) grew 29%, aided by high operational stores and new launches. TEAL’s revenue performance remained flat on a 3-year basis."
“Titan accelerated network expansion with the addition of 125 net stores across segments (vs. ~100 in Q3/Q4FY22), with 39/56 additions in watches and eyewear segments. In our view, a strong Q1 should drive an upgrade to consensus estimates. However, we do not see material changes to our estimates given near-term volatilities due to a recent customs duty increase and higher inflation. We currently have a Buy rating on TITAN with a TP of Rs2,530 (51x Jun’24E EPS)," said Emkay Global.
Rakesh Jhunjhunwala holds 3,53,10,395 Titan shares, or 3.98 per cent of the company, according to the Titan Company shareholding pattern for Q4FY22, which is publicly accessible on the BSE, while his wife Rekha Jhunjhunwala owns 95,40,575 shares or 1.07 per cent of the company's total paid-up capital. The Jhunjhunwala family jointly holds 4,48,50,970 shares in Titan. The Q1FY23 shareholding pattern is yet to come.
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The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.