Glittering track record; long runway for growth

Company
28 Mar 2024
5 Min read 
  • Titan Company has a strong track record and a long runway for growth.
  •  Demand for jewelry has remained steady, but gold inflation has led to a delay in demand.
  •  The company is focusing on expanding its store network and improving execution at existing stores.
  •  Titan has reduced the gold premium compared to peers and believes it can sustain a 12-13% EBIT margin.
  •  The company is cautious about participating in lab-grown diamonds.
  •  Titan expects to sustain healthy growth due to increasing urban population, rising consumer base, and changing consumer preferences.
  •  Analysts project a CAGR of 17% in revenue, 23% in EBITDA, and 26% in PAT during FY24-26.
  •  Titan's valuation is rich, but its competitive positioning and business moats are not easily replicable.
  •  The company has a consumer-centric approach and multiple jewelry brands to cater to different income groups.
  •  Titan's studded ratio and margin profile are healthy compared to peers.
  •  The company is also expanding into other lifestyle categories.
  •  Analysts maintain a BUY rating with a target price of INR4,300 based on 65x FY26E EPS.
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