Buy Titan Company; target of Rs 1215: Motilal Oswal

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26 Aug, 2025 12:21

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FY20 was a challenging year with high gold prices affecting 1QFY20 and the COVID-19 crisis disrupting 4QFY20. Amid this tough operating environment, however, overall topline and earnings growth for Titan Company (TTAN) remained healthy at 6.4% and 8.9%, respectively. This continues a strong trend witnessed in recent years as a result of which sales and PAT CAGRs over FY17–20 were also impressive at 17% and 24%, respectively, Response to the COVID-19 crisis has also been heartening, with clear communication on safety and the addition of two new growth engines – digital thrust and lower price point products. This is besides the already identified growth engines in recent years: (a) gold exchange, (b) wedding jewellery, (c) high-value diamond jewellery, (d) middle-India store expansions, (e) the ‘Golden Harvest’ scheme, and (f) focus on low-market cities. Barring high-value jewellery sales, we note that all of these growth engines are at play in FY21 as well.

However, this is primarily due to the temporary impact of the pandemic in FY21, from which the rebound would be sharp. Upgrade to Buy, with TP of INR1,215 (55x Jun’22 EPS).

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