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Buy Titan Company; target of Rs 1400: Motilal Oswal

Motilal Oswal is bullish on Titan Company recommended buy rating on the stock with a target price of Rs 1400 in its research report dated October 28, 2020.

November 02, 2020 / 12:52 PM IST
 
 
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Motilal Oswal's research report on Titan Company


Titan's (TTAN) jewellery segment's (adjusting for one-off bullion sales) recovery of 98% is remarkable. The first 10 days of the festive season, even when compared to the corresponding (non-COVID) period last year, shows single-digit YoY growth. This, along with likely bunching up of wedding dates in 3QFY21, offers hope that recovery to normalcy may actually take place (compared to continued guidance for 4QFY21). However, we are still assuming 2% jewelry sales decline in 3QFY21 as (a) jewelry sales growth base was higher in 3QFY20 compared to 2QFY20, and (b) unfavorable gold price movements could affect near-term demand.


Outlook


While FY22E multiples at 55x may appear expensive, it is primarily due to temporary impact of the pandemic in FY21, from which the rebound would be sharp over the next couple of years. Maintain Buy with TP of INR1,400 (55x Sep'22 EPS).


For all recommendations report, click here


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Broker Research
first published: Nov 2, 2020 12:52 pm

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