Titan Industries is a long term bet, says Manoj Menon, Senior Analyst at Kotak Institutional Equities.
Menon told CNBC-TV18, "Titan is one interesting case where the valuations are definitely attractive considering the long-term potential for the categories for the company operate in and second the market leadership the company has got in the relevant categories, that's point one. The valuations are in your favor however it's an interesting stock at least in my coverage universe where numbers of moving parts are probably the maximum. You actually have an issue in terms of headwind in terms of consumer demand particularly on the discretionary side so that's not going to change anytime soon, it's probably at least few quarters away so that is definitely that volume headwind for watches as well the jewellery business, that's one."
He further added, "A significant contributing factor to Titan's earnings growth is gold prices also per se because in 70-80% of the revenue of the company comes from gold and essentially gold price which the company charges a consumer is a pass-through, so for any reason gold prices in rupee terms in FY13 is not higher than FY12 then what you will actually get in the company in jewellery business is only the volume growth which doesn't look good. So things are in the balance currently so my view valuations are in favor so it's definitely a stock to look for a long-term holder at these prices."
