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3,800% rise in Q1 net profit! Is it time to invest in Rakesh Jhunjhunwala's top stock?

3,800% rise in Q1 net profit! Is it time to invest in Rakesh Jhunjhunwala's top stock?

Ace equity investor Rakesh Jhunjhunwala together with his wife held over a 5 per cent stake in the company as of June 30, 2022.

Domestic brokerage firm Prabhudas Lilladher upgraded the target price for Titan Company to Rs 2,607 (from Rs 2,520 earlier) post Q1 results. (Representational image) Domestic brokerage firm Prabhudas Lilladher upgraded the target price for Titan Company to Rs 2,607 (from Rs 2,520 earlier) post Q1 results. (Representational image)

Watches-to-jewellery major Titan Company received bullish calls from brokerages post-June quarter results. The company on Friday reported 3,825 per cent year-on-year (YoY) growth in net profit at Rs 785 crore in Q1FY23 mainly on low-base effect. It had reported a profit of Rs 20 crore in the corresponding quarter a year ago, which witnessed a hit from the outbreak of the Covid pandemic.

Sequentially, Titan’s net profit grew nearly 54 per cent from Rs 510 crore in the previous quarter ended March 31, 2022. Shares of the company traded 0.62 per cent higher at Rs 2,447.5 at around 11.13 am (IST) on Monday. On the other hand, the benchmark BSE Sensex was up 242 points, or 0.41 per cent, at 58,629 at around the same time.

Domestic brokerage firm Prabhudas Lilladher upgraded the target price for Titan Company to Rs 2,607 (from Rs 2,520 earlier) post Q1 results. 

“We estimate 33.82 per cent PAT CAGR over FY22-24 and remain positive given the structural story on account of market share gains, strong balance sheet, franchisee-based model and strong brand. However, valuations at 57.3 times FY24 leave little room for re-rating,” it said.

Ace equity investor Rakesh Jhunjhunwala together with his wife held over a 5 per cent stake in the company as of June 30, 2022.

Consolidated total income climbed around 170 per cent YoY to Rs 9,487 crore during the quarter under review against Rs 3,519 crore in Q1 FY22.

While sharing its view on Titan, ICICI Securities said, “Titan reported a healthy operational performance with a strong beat on the margins front. Buoyed by strong festive or wedding season and a normalised quarter after a gap of two years, the jewellery division registered its second highest ever quarterly revenues in Q1FY23.” The brokerage has set a target price of Rs 2,800 for Titan, indicating an upside of 14 per cent from the current market price.

“Titan has been an exceptional performer in the discretionary space with stock price appreciating at around 32 per cent CAGR in last five years. We continue to remain structurally positive on the stock as high growth visibility justifies premium valuations and maintain ‘Buy’ on the stock,” ICICI Securities said in a report.

Published on: Aug 08, 2022, 11:46 AM IST
Posted by: Aparna Banerjea, Aug 08, 2022, 11:42 AM IST