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Titan Company outshines index gainers, jumps 3%; brokerages expect 18% upside

Margin recovery in jewellery was heartening and surpassed expectation, inspiring further confidence in Titan's earnings growth in addition to the already healthy sales outlook, said Motilal Oswal.

December 31, 2021 / 11:12 AM IST
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Titan Company share price jumped over 3 percent intraday today as the Indian equity market brushed aside surging Omicron fears. The stock was the top Sensex gainer trading at Rs 2,523.45, up Rs 86.80 or 3.56 percent at 10:29 hours. It has touched an intraday high of Rs 2,531.55 and an intraday low of Rs 2,440.

It was trading with volumes of 35,391 shares, compared to its five-day average of 27,983 shares, an increase of 26.48 percent.

Domestic research and broking firm Motilal Oswal has retained a buy call on the stock with a target of Rs 2,830 per share, an upside of 12 percent from the current market price.

According to the research firm, the margin recovery in jewellery was heartening and surpassed expectation, inspiring further confidence in Titan's earnings growth in addition to the already healthy sales outlook. It has raised its FY22/FY23 EPS (earnings per share) estimates by 13%/3%.

"Titan Company has a strong growth runway, given its market share of less than 10% and the continuing struggles faced by its unorganised and organised peers. Its medium to long-term earnings growth opportunity is the best-of-breed, which is reflected in its EPS compound annual growth rate (CAGR) of 24% over the past three years before the Covid impact in FY21. The estimated EPS CAGR over FY20-FY24 is also healthy at 24%," it said.

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"At its current valuation of 79.3x FY23E EPS, the stock’s near-term multiples appear expensive, although its long runway for profitable growth warrants premium multiples. The stock remains our top pick in the discretionary consumption space. We maintain our buy rating with a target of Rs 2,830 per share (70x FY24 EPS)," the brokerage firm said in its report.

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Malay Thakkar, technical research associate at GEPL Capital, has recommended a buy call on the stock with a target of Rs 2,980, upside of 18 percent from the current level.

"Titan Company on mid-term charts is moving in a higher-highs and higher-lows formation, indicating that the mid-term trend of Titan remains strongly bullish. Currently the stock is breaking out of a consolidation pattern (falling wedge) on weekly charts after taking support at its 20-week moving average (Rs 2,265). On the indicator front, the RSI can be seen moving higher after forming a bullish hinge near the 60 mark, indicating increasing bullish momentum in the prices," he said.

"Going forward, we expect the price to move to the previous swing high of Rs 2,670. If the prices manage to sustain above this level, we might see the price move towards Rs 2,980," he added.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​

 
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first published: Dec 31, 2021 11:12 am
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