Hold Titan Company; target of Rs 3000: Emkay Global Financial

Emkay Global Financial recommended hold rating on Titan Company with a target price of Rs 3000 in its research report dated August 03, 2023.

Broker Research

August 06, 2023 / 11:28 IST

Hold

Emkay Global Financial's research report on Titan Company

TTAN’s PAT came in 18-20% lower vs. expectations, due to a ~200bps miss on EBITDA margin. TTAN attributed the 250bps dip in jewelry margin to the 100bps one-off, inferior regional mix and growth investments (gold price correction, higher gold exchange and marketing). However, TTAN retained its full-year EBIT margin guidance of 12-13%, on continued strong trends in a studdedheavy Q2TD and expectations of a relatively richer revenue mix in Q3 (vs. Q1). In our view, Street’s margin estimate will now gravitate to the lower end of the guided band on Q1 disappointment and high competitive intensity/hallmarking. While we stay confident on mkt-share gains, on TTAN’s cross-functional strengths and incremental growth potential from International, Taneira and Handbags, we retain HOLD on near-term margin uncertainty.

Outlook

We reduce our TP by ~5% to Rs3,000 (54x Sep-25E EPS) on a 6-8% earnings cut and 3M rollover.

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