Titan rises to lifetime high, but valuation no longer cheap: Amit Jeswani

Stallion Asset founder Amit Jeswani.

Titan Company shares soared to a lifetime high after reporting a strong June quarter update, although a section of the market is concerned about the stock’s expensive valuation.

The shares surged to Rs 3,211.10 on the BSE on July 7, before closing lower. Titan shares have gained about 8 percent over the past month.

Titan trades at 65 times its estimated FY24 earnings, on the higher end of the valuation curve. According to Amit Jeswani, founder of Stallion Asset, Titan's typical valuation range for one-year forward terms fluctuates between 55 times PE and 70 times PE.

Jeswani said that in the retail category, Titan's revenue growth outperforms that of most apparel retailers except Trent. Trent’s revenue grew 120 percent from the pre-COVID period to FY23. Both Trent and Titan stand out in the retail category.

He said that despite the impact of the pandemic, Titan's revenue almost doubled over the past three years, while D-Mart posted 72 percent growth.

Titan’s June quarter revenue grew 20 percent from a year earlier in the three months ended June, the company said on July 6. All key consumer businesses, including jewellery, watches and wearables, and eyecare, reported double-digit growth.

On initial public offerings, Jeswani said Senco Gold trades at an attractive valuation of 13-14 times and could potentially see a listing pop, similar to that of Ideaforge Technology.

Senco Gold shares enjoy a premium of over 35 percent in the grey market. This follows the trend of substantial grey premiums commanded by shares of other IPO companies such as IdeaForge (75 percent premium) and Cyient DLM (45 percent) in the calendar year 2023.

IdeaForge shares, which were sold at Rs 672 each, listed on July 7 and touched a high of Rs 1,344.