Titan Company’s shares witnessed a significant decline of over 7% following the release of its weaker-than-expected March quarter results. The stock dropped by 7.57% to reach an intra-day low of Rs 3,285 per share on the NSE.
Key Financial Highlights:
- Titan reported a 5% year-on-year increase in consolidated net profit, reaching Rs 771 crore for the quarter ending on March 31, 2024.
- Total income for the quarter surged by 22% year-on-year to Rs 11,472 crore.
- The company’s EBIT for the quarter experienced a 10% year-on-year growth, reaching nearly Rs 1,192 crore.
- In the Jewelry segment, total quarterly income grew by 19% year-on-year, amounting to nearly Rs 8,998 crore.
- The ‘Watches & Wearables’ segment saw its total income for the quarter stand at Rs 940 crore, marking an 8% year-on-year increase.
Brokerage Recommendations:
- Kotak Institutional Equities:
- Revised its outlook on Titan stock, adjusting the target price from Rs 3,750 to Rs 3,600.
- Lowered FY25/26E consolidated jewelry EBIT margin estimate by 90-110 basis points and corresponding EPS estimates by 5-8%.
- Projected a 17% consolidated jewelry sales CAGR over FY2024-27E.
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Motilal Oswal Financial Services:
- Maintained a buy call on Titan stock with a target price of Rs 4,100.
- Revised downward its earnings per share (EPS) estimates by 6% and 5% for FY25E and FY26E, respectively.
- Highlighted Titan’s aggressive growth strategy despite subdued near-term growth outlook, focusing on new store additions, attractive designs, and market share gains.
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JM Financial:
- Maintained a buy recommendation on Titan Company’s stock but revised its target price downward to Rs 3,825 from Rs 3,940.
- Noted that Titan’s March-quarter earnings fell below expectations due to lower margins across segments.
- Cautioned that near-term growth and margins may be affected by factors such as volatility in gold prices and electoral events.
