Buy Titan Company, target price Rs 2,900: Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has buy call on Titan Company Ltd. with a target price of Rs 2900.0. The current market price of Titan Company Ltd. is Rs 2110.8.

Titan Company Ltd., incorporated in the year 1984, is a Large Cap company (having a market cap of Rs 187496.00 Crore) operating in Gems and Jewellery sector.

Titan Company Ltd. key Products/Revenue Segments include Jewellery, Watches, Gold, Eyewear, Traded Goods, Precious & Semi Precious Stones, Other Operating Revenue, Other Services for the year ending 31-Mar-2021.

Financials
For the quarter ended 31-03-2022, the company has reported a Consolidated Total Income of Rs 7872.00 Crore, down -22.01 % from last quarter Total Income of Rs 10094.00 Crore and up 4.25 % from last year same quarter Total Income of Rs 7551.00 Crore. Company has reported net profit after tax of Rs 527.00 Crore in latest quarter.

Investment Rationale:
Titan Company’s (Titan’s) management outlined ambitious growth outlook for the company in the next five years at its analyst conference held on May 13, 2022. It aims to achieve consistent double digit revenue growth over the next five years by strengthening core businesses such as watches, Jewellery and eyecare, while scaling-up recent ventures such as Taneira (woman ethnic wear), Fastrack bags and international business in the medium term.

This will be done through efficient capital allocation policywherein 70-75% of cash profits will be ploughed back into growing businesses while 25-30% of profitswill be distributed amongst shareholders as dividends. Profitability will consistently improve with thejewellery business’ margins remaining stable, and watches and eyecare expected to see an improvementin margins, while new ventures would add- to profitability in the coming years.

Promoter/FII Holdings
Promoters held 52.9 per cent stake in the company as of 31-Mar-2022, while FIIs owned 18.4 per cent, DIIs 10.21 per cent.