Standalone revenue grew by 17.4 percent year-on-year to Rs 7,287 crore in Q3FY21, including the sale of gold bullion to the extent of Rs 340 crore.
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Titan Company share price rose in the early trade on February 11, a day after the Tata group company reported a 10.9 percent year-on-year decline in standalone profit at Rs 419 crore for the quarter ended December 2020, dented by impairment provision for FLAG investments.
Standalone revenue grew by 17.4 percent year-on-year to Rs 7,287 crore in Q3FY21, including sale of gold bullion to the extent of Rs 340 crore.
Also Read – Titan Q3 profit falls 11% to Rs 419 crore due to impairment provision
Here is what brokerages have to say about the stock and the company after Q3:
Sharekhan
Titan’s jewellery business continued its festive season growth momentum. We expect the double-digit growth trajectory in the jewellery business to sustain, with higher demand for wedding jewellery. In the eyewear business, the focus is on improving profitability, while in watches, the stress will be on achieving sustainable revenue growth.
Overall, we expect Titan to benefit from people shifting to trusted brands and market share gains. This, along with a relatively stable balance sheet and strong return profile, makes it a better play in the retail space. We maintain our buy recommendation on the stock with an unchanged price target of Rs 1,710.
Prabhudas Lilladher
We increase our FY21/22/23 EPS estimates by 22.6%/7.1%/3.0% on the back of 1) full recovery in jewellery with strong momentum in January 2021 2) full recovery in watches from 4Q with superior margins 3) likely turnaround in eyewear with highest ever margins and 4) strong scalability scope in Taneira by Trunk (pop-up store for three days in Tanishq outlets) marketing campaign.
The company’s numbers were better than expected margin delivery across segments. We believe Titan story is getting better as eyewear and Taneira will add another leg of growth and brand strength, strong balance sheet and franchisee based model will enable sustain strong growth. We estimate 36.6 percent PAT CAGR over FY20-23. We shift our target price base to DCF and assign a target price of Rs 1601 (earlier under review). Assign hold and recommend accumulation on dips for long term gains.
Motilal Oswal
Changes to the model have led to ~8 percent higher EPS growth forecasts for FY21E and ~2.5 percent each for FY22E/FY23E.
Store expansions continue unabated, indicating the company’s and franchisees’ confidence on its medium and long-term growth prospects. This would further increase the opportunity to gain from unorganized and other organized players as they are expected to struggle even further going forward
While valuations of 67.9x/52.2x FY22E/FY23E EPS appear expensive, the long runway for profitable growth deserves premium multiples. Near-term valuations appear expensive because of the impact of COVID-19 in FY21. Maintain buy with a target price of Rs 1,800 a share (60x FY23E EPS).
Dolat Capital
We have revised FY21/22/23E EPS estimates to Rs 10.3/25.4/30. We believe that the recovery in the Jewellery would continue. Being a niche player in the industry, Titan would attract higher valuations. We maintain buy, with a target price of Rs 1,798 (60x FY23E).
ICICI direct
Factoring in the Q3FY21 performance and improvement in demand outlook, we revise our earnings estimates upwards by 3-7 percent for FY22-23E. The company’s ‘War on Waste’ programme is well on track with tight control on inventory position and higher focus on gold on lease replenishment (~56 percent of inventory).
We expect initiatives to improve cash positions and significantly enhance RoIC (from 31 percent in FY20 to ~42% in FY23E). We build in revenue and earnings CAGR of 14 percent and 22 percent, respectively in FY20-23E. Healthy balance sheet, sustained focus on market share gains and better earnings visibility prompts us to upgrade from hold to buy with a revised target price of Rs 1830 (60x FY23E EPS, previous TP: Rs 1660).
Morgan Stanley
Morgan Stanley has maintained equal-weight call with a target at Rs 1,358 per share. The results were in-line, with positive surprise on eyewear & watches.
The jewellery demand recovery was better than management’s expectation, while they sounded constructive on the outlook for FY22 & FY23, reported CNBC-TV18.
Credit Suisse
Research house Credit Suisse has kept neutral call and raised target to Rs 1,650 per share.
The full recovery in jewellery business and further acceleration in January. It increase FY21-23 EPS estimate by 18-20 percent, reported CNBC-TV18.
At 0917 hours, Titan Company was quoting at Rs 1,565, up Rs 1.85, or 0.12 percent on the BSE.
The share touched its 52-week high of Rs 1,620.95 on January 6, 2021 and 52-week low of Rs 720 March 24, 2020. It is trading 3.45 percent below its 52-week high and 117.36 percent above its 52-week low.
