Titan share price gained on July 7 morning after the jewellery maker shared a strong operational performance update for Q1 FY24. The company registered a 20 percent year-on-year (YoY) revenue growth with all key consumer businesses exhibiting double-digit growth in the quarter gone by.
At 9.15 am, the stock opened over 2 percent higher and hit a new high of Rs 3,205 on the NSE. The stock is at its all-time high and is hitting a fresh 52-week high daily.
Follow our live blog for all the market action
Titan's jewellery division grew 21 percent YoY in Q1FY24. Buyer growth was higher than average ticket size growth for this period, said the company.
In the watches and wearables division, it saw a 13 percent YoY growth, which comprised 8 percent growth in analog watches segment and 84 percent YoY growth in wearables. However, on a sequential basis, watches growth has slowed to 2 percent.
Morgan Stanley has an "overweight" rating on Titan with a target price of Rs 3,207 a share. "Q1 performance was particularly boosted by the Akshaya Tritiya festival and increased wedding-related purchases in June," it said.
Another foreign broking firm, Goldman Sachs, has a "buy" call with a target price of Rs 3,175 a share. The jewelry sales growth has exceeded expectations, resulting in a four-year compounded annual growth rate (CAGR) of 23 percent, it said.
Caratlane, a subsidiary of Titan, demonstrated a 32 percent year-over-year revenue growth, indicating a healthy four-year CAGR of nearly 50 percent. The eyecare division's revenue grew by 10 percent YoY with trade and distribution channel growing ahead of Titan Eye+, said analysts.
The "buy" ratings from brokerages come despite the stock trading at expensive valuations, over 58 times estimated FY25 earnings per share. The optimism stems from expectations of Titan delivering strong growth in the face of competition.
Analysts at domestic broking firm Prabhudas Lilladher believe that improved mix, hallmarking benefits, expansion of 100 stores in eyewear in FY24 and a scale-up in emerging businesses like Taneira and wearables will be major growth drivers for Titan.
In Q1, Titan also reduced franchisee incentives for Tanishq stores, according to checks conducted by Kotak Institutional Equities. This indicates management's focus on expanding jewellery EBIT margins or defending margins in the event of any rise in competitive intensity, according to Kotak's analysts.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
