What should investors do with Titan Company post Q4 results: buy, sell or hold?

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Titan Company share price slipped 2 percent in early trade on April 30, a day after the company reported its March quarter earnings.

The company reported a healthy 48.2 percent year-on-year (YoY) growth in standalone profit for Q4 FY21 driven by jewellery business.

Profit during the quarter increased to Rs 529 crore, up 48 percent against Rs 357 crore logged in the year-ago quarter. The sequential growth in bottomline was 26.3 percent.

The standalone revenue from operations grew by 61.1 percent YoY to Rs 7,135 crore during the quarter ended March 2021, but it was down 2.1 percent quarter-on-quarter (QoQ).

Also Read - Titan Company Q4 profit jumps 48% to Rs 529 crore, revenue grows 61% led by jewellery business

Here is what brokerages have to say about the stock and company after Q4 earnings:

Citi | Rating: Neutral | Target: Rs 1,660

The Q4 margin was a miss, while there is a downside risks due to fresh COVID restrictions. The valuation cap the upsides. The market is already factoring a sharp business recovery over FY22.

JPMorgan | Rating: Neutral | Target: Rs 1,665

It was an in-line Q4, while lockdowns put brakes on growth momentum. The higher competition & adverse mix may keep jewelry margin range-bound.

UBS | Rating: Sell | Target: Rs 1,400

The studded ratio improved sequentially but remained lower YoY, while contribution of wedding jewellery sales normalised to FY20 levels.

Morgan Stanley | Rating: Equal-weight | Target: Rs 1,358

The Q4 results were in line but a miss on margin to estimates. The management commentary is cautious on the near-term demand outlook.

Jefferies | Rating: Hold | Target: Rs 1,450

The jewellery business led to revenue & profit growth. Its jewellery business gained market share while other businesses were mixed. FY22 is particularly tough & we expect a volatile trend.

Prabhudas Lilladher | Rating: Accumulate | Rating: 1,663

Near term outlook looks hazy with the second COVID wave leading to 50% store closures, postponement of weddings and deferment of discretionary expenses.

We expect slow expansion Jewellery margins given focus on growth and market share gain.

Motilal Oswal | Rating: Buy | Target: Rs 1,785

Given the ongoing lockdown/restrictions across India, we have cut our FY22E EPS estimate by 12.2%. However, there is no material change to our FY23E EPS

While valuations of 50.6x FY23E EPS are not cheap, the long runway for profitable growth deserves a premium multiple

Sharekhan | Rating: Buy | Target: Rs 1,710

We have reduced our earnings estimates for FY2022 to factor in lower sales in H1FY2022, broadly maintaining it for FY2023. We expect strong recovery in the business performance of Titan post the easing of COVID-19 uncertainties due to market share gains and pent-up demand (largely in the wedding jewellery segment).

Balance sheet strength will help it to compete well with strong regional and large players in the domestic market. Strong brand recognition in the jewellery space, balance sheet strength, and good return ratios make it one of the better plays in the retail space.

Dolat Capital | Rating: Buy | Target: Rs 1,648

We have significantly revised our FY22E revenue estimates to factor in the impact of localized lockdowns in April 2021. We believe that the closure of stores would directly impact the revenue growth. Further, we have downward revised margins for the year to factor in low operating leverage associated with reduction in sales. In line with the reduction in EBITDA we have revised our EPS estimates.

At 09:19 hrs, Titan Company was quoting at Rs 1,478.50, down Rs 27.80, or 1.85 percent on the BSE.

The share touched a 52-week high of Rs 1,620.95 and a 52-week low of Rs 809.85 on 06 January, 2021 and 18 May, 2020, respectively.

Currently, it is trading 8.79 percent below its 52-week high and 82.56 percent above its 52-week low.