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Titan shares fall 1% in reaction to company update


Titan shares fall 1% in reaction to company update

To buy to sell Company of the Titans to share

Shares of Titan Company fell nearly 3% on Thursday in reaction to the company’s business update. As of 9:45 a.m., the company’s shares were down 2.34% at Rs 2,481.70 on BSE.

The company ended the quarter on a high note despite the fact that the fourth quarter of FY22 was disrupted twice – first due to partial shutdowns caused by the Omicron wave in January and again during the month of March in which consumer sentiments were negatively affected due to the sharp increase and volatility in gold prices and uncertainty due to a fragile geopolitical situation, the jeweler said in an exchange filing.

Underlying demand remained strong across all of its businesses, with most segments showing year-over-year (YoY) growth on a very strong basis in the fourth quarter of FY21.

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“Network expansion and campaigns continued to progress well in anticipation of an optimistic Q1 FY23 which should be normal after a two-year lockdown gap over the same period,” Titan said.

The company’s jewelry business suffered as it felt the brunt of the coronavirus, but watches and wearables saw good growth momentum in a challenging external environment, with sales increasing across all offline channels thanks to the Titan brand. At the same time, growth in the ophthalmology division was driven by frames and sunglasses.

Here’s what the brokerage firms are saying:

Morgan Stanley

The brokerage firm has an “overweight” call on Titan shares with a target price of Rs 2,700. Titan continues to perform well ahead of an upbeat first quarter, the brokerage firm said. He noted that management seemed optimistic about network expansion and campaigns.

CLSA

With an “underperforming” call and a target price of Rs 2,540, CLSA said a better mix would support earnings even if turnover delivery is weak. The brokerage firm expects an EBITDA margin of 13.2% leading to 15% year-on-year earnings growth.

Prabhudas Lilladher

The brokerage company cut its EPS estimates by 2.1% for FY22, 2.7% for FY23 and 6.0% for FY24, following demand trends slower than expected in jewelry, watches and eyewear. CLSA retained its “buy” rating on Titan shares and said that while the structural story remains intact, it expects long-term returns given the rich valuations.

Kotak Institutional Stocks

The brokerage has an “added” rating on the stock with a fair value of Rs 2,525. According to the national brokerage, the fourth quarter is a blip in a promising story. The brokerage firm said the fourth quarter shows stable jewelry sales compared to its expectation of 15-16% growth.


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