With another wedding season ahead, analysts are upbeat on Titan

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With another wedding season ahead, analysts are upbeat on Titan
BCCL
  • Titan reported strong March quarter earnings thanks to healthy consumer demand during the wedding season.
  • The management indicated good potential demand in May and June due to another upcoming wedding season.
  • Brokerages expect the share price of India’s largest branded jewellery maker to rise up to ₹21%, with most of them recommending to buy the stock.
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Shares of Titan rose 1.5% on Thursday after it reported strong March quarter earnings. The results were in line with analysts expectations, thanks to healthy consumer demand during the January to March wedding season.

The management also indicated good potential demand in May and June due another upcoming wedding season.

Titan boasts of an outstanding track record that surpasses its peers, with superior short-term growth prospects, and exceptional long-term growth potential, all of which justify its high valuations, said analysts at Motilal Oswal.

Titan reported a 50% on year growth in its standalone Q4 net profit to ₹734 crore. For the full FY23, Titan’s net profit rose nearly 53% to ₹3,333 crore due to the low-base effect of FY22.

Aided by wedding season demand, Titan’s revenue from operations during the quarter grew 33% on year to ₹9,704 crore, while for the full FY23, the revenue grew 40.7% to ₹38,270 crore.

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The company highlighted that demand was impacted in March due to price volatility in gold, which persisted into the first half of April, but turned robust again after Akshay Trithiya.

The next two months are expected to bring strong demand given the upcoming wedding season, with a higher number of wedding dates.

“To be fair, gold-price volatility does have its impact on buying behaviour but consumer-spending continues to be reasonably strong when there are occasions to do so, and a promising wedding calendar for May-June is likely a good indicator for the months ahead,” said a report by JM Financial.

Its international business is also performing well. Currently, there are six stores in the UAE and one in the US. The company plans to expand to 25 international stores in FY24 with many stores in the GCC region. Besides, it is targeting an additional 40 stores in India this year.

The company opened its first Tanishq store in the USA and a Titan Eye+ store in Dubai this year. It opened 12 new stores of Tanishq, 18 of Mia and one of Zoya during the quarter respectively.

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Titan’s overall store count came in at 2,710 across 404 towns at the end of March 2023.

“The outlook remains robust. Titan has ample opportunities for growth, given its market share of sub-10% in jewelry and the ongoing challenges faced by its unorganized and organized peers. Its medium-to-long-term earnings growth potential is unparalleled,” said analysts at Motilal Oswal.

Brokerages expect the share price of India’s largest branded jewellery maker to rise up to ₹21% with most of them recommending a ‘buy’ on the stock.
Brokerages Rating Target Price
Goldman SachsBuy ₹3,175
JP Morgan Overweight ₹3,000
Macquarie Outperform ₹3,200
CLSABuy ₹3,210
Motilal OswalBuy ₹3,080
Kotak Institutional EquitiesAdd ₹2,970
JM FinancialBuy ₹3,090
Nuvama Institutional EquitiesBuy ₹3,218
Religare BrokingBuy ₹3,147


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