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Buy Titan Company; target of Rs 1300: Motilal Oswal

Motilal Oswal is bullish on Titan Company recommended buy rating on the stock with a target price of Rs 1300 in its research report dated August 10, 2020.

August 12, 2020 / 04:01 PM IST
 
 
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Motilal Oswal 's research report on Titan Company


Titan’s (TTAN) 1QFY21 results were broadly in line with estimates. Gold volumes declined by 81% during the quarter. However, decent recovery was seen in Jun’20 with Tanishq’s like-to-like growth declining 18% YoY. The recovery prospects in the jewelry segment (over 80% of sales) appear brighter with good demand in Jul’20 (101% of sales in Jul’19, albeit aided by weak base and significant activation in Jul’20) and first week of Aug’20 as well. However, recovery in watches/eyewear is tracking slower than jewelry. Another impact of ineffective hedges on margins in 2QFY21 as well is expected. However, we believe there is a possibility that recovery in the jewelry business may take place in 3QFY21, instead of 4QFY21 as guided by management. However, given the volatile demand and COVID environment, we prefer to be conservative and are assuming recovery in 4QFY21.


Outlook


We have upgraded the stock to Buy in our Annual Report analysis note last week. Maintain Buy with a TP of INR1,300 with 17% upside.


For all recommendations report, click here


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first published: Aug 12, 2020 03:12 pm

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