Titan share price has outperformed the equity benchmark Sensex over the last year. Titan’s share price has gained about 29 percent while the Sensex has gained about 21 percent in the last year.
Titan share price: Shares of Titan Company declined over 7 percent in morning trade on BSE on Monday, May 6, after the company reported weaker-than-expected March quarter results. Titan’s share price opened at ₹3,481.10 against its previous close of ₹3,535.40 and fell over 7 percent to the level of ₹3,287. Around 10:15 am, Titan’s share price traded 5.75 percent lower at ₹3,332 apiece. Equity benchmark Sensex was 0.30 percent up at 74,096 at that time.
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Titan Company Q4 Result
After market hours on Friday, May 3, Titan reported a 5 percent year-on-year (YoY) rise in consolidated net profit of ₹771 crore for the quarter that ended on March 31, 2024. Total income for the quarter rose 22 percent YoY to ₹11,472 crore.
The company’s EBIT for the quarter grew by 10 percent YoY to nearly ₹1,192 crore.
The Jewellery segment’s total quarterly income grew 19 percent YoY to nearly ₹8,998 crores, while ‘Watches & Wearables’ total income for the quarter stood at ₹940 crores, up 8 percent YoY.
Titan Share Price Movement
By jumping nearly 29 percent, Titan shares have outperformed the equity benchmark Sensex over the last year, which has gained about 21 percent in the same period.
Titan Company’s share price hit its 52-week high of ₹3,885 on the BSE on January 30 this year. Its 52-week low level is ₹2,666.55, which it hit on May 5 last year. For the current calendar year, till May 3 close, Titan’s share price is down about 4 percent.
Should you Buy, Sell, or Hold the Stock?
Top brokerage firms have retained their previous recommendation on Titan stock, but some have trimmed their estimates due to gold inflation and the stock’s fair valuation. Let’s take a look at what some of them say:
Motilal Oswal Financial Services
Motilal maintained a buy call on Titan stock with a target price of ₹4,100. It said Titan remains its top consumer discretionary play in India. However, the brokerage firm cut its earnings per share (EPS) estimates by 6 percent and 5 percent for FY25E and FY26E, respectively.
The brokerage firm believes the near-term growth outlook of Titan appears subdued due to high gold inflation affecting demand sentiments. This, however, is a typical trend during inflationary periods.
“Despite the near-term jitteriness, the company remains aggressive in its growth outlook, driven by new store additions, attractive designs, and market share gains, et al. Titan also maintains a Jewelry EBIT margin of 12-13 percent for FY25. We will monitor the near-term consumption trend,” Motilal said.
Motilal underscored that Titan is on track to achieve the existing jewelry revenue guidance of 2.5 times FY22 revenue by FY27, implying an impressive 20 percent CAGR during the period.
The brokerage firm believes with a current market share of nearly 8 percent in a sizable nearly ₹5 lakh crore market, there is significant headroom for growth for Titan.
Kotak Institutional Equities
Kotak has an add call on Titan stock with a revised fair value of ₹3,600 from ₹3,750 earlier. It has trimmed the FY25/26E consolidated jewelry EBIT margin estimate by 90-110 bps and cut EPS estimates by 5-8 percent.
“We raise FY25-26E jewelry sales growth by 2 percent and reduce jewelry EBIT margin by 90-110 bps; net result: 5-8 percent EPS cut. We estimate a 17 percent consolidated jewelry sales CAGR over FY2024-27E, led by (1) a 15 percent domestic CAGR on nearly 9 percent store CAGR, (2) a 70 percent CAGR in international business, and (3) a 30 percent CAGR in Caratlane,” said Kotak.
“We value Titan at 60 times June 2026E PE (price-to-earnings ratio). The stock is priced for perfection; we would keep an eye on the adoption of lab-grown diamonds in India (and Titan’s studded share) and Aditya’s Birla Group’s upcoming jewelry foray,” Kotak added.
JM Financial
JM Financial maintained its buy call on the stock but cut the target price to ₹3,825 from ₹3,940, citing Titan’s March-quarter earnings were below expectations.
“Revenue was inline, but lower margin across segments (weaker gross margin in jewelry and the lack of operating leverage in other segments) drove an overall nearly 3 percent miss on segment profits. The performance of the watches and eyewear segments has been volatile, and more work is needed before it reaches a steady state,” JM Financial said.
The brokerage firm believes growth and margin will likely be impacted in the near term due to volatility in gold prices, elections, and lower wedding dates.
However, JM Financial pointed out that for the full year, Titan will target maintaining its jewelry division growth momentum and it reiterated 12-13 percent margin guidance.
“Titan stock could react negatively to weak Q4 results and near-term demand issues. From the long-term perspective, considering a large opportunity size and Titan’s superior execution capabilities, headroom for growth remains strong,” said JM Financial.
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