Buy Titan Company; target of Rs 3210: Motilal Oswal

Motilal Oswal's research report on Titan Company

TTAN’s robust business momentum continued in 2QFY23. The three-year Jewelry sales CAGR of 22-23% in recent quarters is extremely remarkable. The management indicated a healthy 17-19% growth in festive season demand across its key businesses in Oct’22. Its guidance on margin for subsequent quarters is relatively muted, given its outperformance in 2QFY23, as there will be: a) a lesser share of diamond inventory gains, b) lower proportion of studded Jewelry vis-à-vis 2QFY23, and c) additional investment in ad spends, especially in the Eyewear segment, to boost growth. As indicated in our detailed note of last week, TTAN has reported a far superior revenue and earnings growth metrics v/s other largecap Consumer plays in recent years. Its medium-term outlook is also attractive. We maintain our Buy rating.

Outlook

The stock's near-term multiples appear expensive, but its long runway for profitable growth warrants premium multiples. We maintain our Buy rating, with a TP of INR3,210 per share (63x Sep'24E EPS).