Business News: Titan Company gains 6% in two days; stock nears record high.
Titan Company shares are traded higher for the second consecutive day, rising 3 per cent at Rs 1,614 on the BSE in intra-day trade on Wednesday. The stock has gained 6 per cent in the past two days in a market that has continued to move. In comparison, the S&P BSE Sensex was 0.27 per cent higher at 50,775 points at 10:05 am.
On April 29, Titan reported robust sales growth of 61 per cent year on year (YoY) in the January-March quarter (Q4FY21) but operating performance was below Street estimates on lower Ebitda (earnings before interest, taxes, depreciation, and amortization) margins (down 250 basis points) due to a steep fall in gross margin. The company attributed the margin miss to weak revenue mix, higher coins & B2B sales in jewelery and impact of custom duty reduction.
Strong earnings run rate in H2FY21 offers visibility of the likely earnings recovery in FY22 on full unlocking. Titan remains our preferred pick in discretionary, offering a faster growth outlook, the brokerage firm said in result update. It maintains ‘buy’ rating on the stock with target price of Rs 1,725 per share.
“Though the near term may present a volatile demand scenario, we believe Titan is a structural growth story and appears to be a key beneficiary of the unorganized to organized shift in Indian jewelery market. Focus on market share gains and maintaining b / s strength (RoCE: 30 per cent plus) positions Titan as our preferred pick in the discretionary category, ”ICICI Securities said in Q4FY21 result update.