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Shares of Titan Ltd rose on the BSE in Monday’s opening deals after the jewellery and watches maker reported a multi-fold increase in consolidated net profit at ₹790 crore in the first quarter ended June on the back of strong festive demand. The company had posted a consolidated net profit of ₹18 crore in the year-ago period.
The company’s onsolidated total income during the quarter under review stood at ₹9,487 crore as against ₹3,519 crore in the same period last fiscal.
“Titan has a strong runway for growth, given its market share of sub-10% in Jewelry and continued struggles faced by its unorganized and organized peers. Its medium-to-long-term earnings growth visibility is nonpareil,” said domestic brokerage and research firm Motilal Oswal.
Despite the volatility in gold prices and COVID-led disruptions, earnings CAGR has been stellar at 24% for the past five-years ending FY22. The brokerage expects this trend to continue, with a 26% earnings CAGR over the next couple of years.
“The stock’s near-term multiples appear expensive, but its long runway for profitable growth warrants premium multiples. We maintain our Buy rating on Titan shares with a target price of ₹2,670 per share,” it added.
“Titan offers high-teens growth visibility and an improving RoIC profile (~45% by FY25E), led by low penetration and focus on improving product assortment + profitability turnaround in eyewear/Caratlane businesses. A faster traction in Taneira, handbags, and international operations remains a potential upside. We maintain Buy with a revised target price of ₹2,700 ( ₹2,530 earlier),” said another brokerage Emkay.
As per the recent shareholding pattern on the BSE, investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala hold 3.98% stake and 1.07% stake in the Tata Group company as of June 2022.
“The financial year has begun well for us and we delivered a strong performance in Q1 across our business segments. Despite the challenging macro environment, the outlook for the remaining quarters looks positive and we continue to execute our investment plans in India as well as chosen international geographies,” Titan Ltd Managing Director CK Venkataraman said.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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(This story has not been checked by Kashmir Bulletin and is auto-generated from other sources)
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