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Rakesh Jhunjhunwala Portfolio: Titan shares tank 4% post Q4 numbers 

Rakesh Jhunjhunwala Portfolio: Titan shares tank 4% post Q4 numbers 

The stock opened lower at Rs 2,351 against the previous close of Rs 2386.60 on BSE 

Rakesh Jhunjhunwala Portfolio: Titan shares tank 4% post Q4 numbers  Rakesh Jhunjhunwala Portfolio: Titan shares tank 4% post Q4 numbers 

Shares of Tata group firm Titan Company Ltd,  a part of Big Bull Rakesh Jhunjhunwala's portfolio tanked over 4 per cent to hit an intraday low of Rs 2,300.80 after the company reported a 7.21 per cent decline in its consolidated net profit at Rs 527 crore in the fourth quarter ended March 2022. 

It had posted a net profit of Rs 568 crore in the January-March quarter of FY21, Titan Company said in a regulatory filing. 

The stock opened lower at Rs 2,351 against the previous close of Rs 2386.60 on BSE. With a market capitalisation of more than Rs 2,00,000 crore, the shares stand higher than 200 day moving averages but lower than 5 day, 20 day, 50 day and 100 day moving averages. 

Its total income was up 4.25 per cent to Rs 7,872 crore during the period under review as against Rs 7,551 crore in the corresponding period of the preceding fiscal.  

The company's revenue from sales of products was down 1.14 per cent to Rs 7,267 crore in the fourth quarter of FY22 as against Rs 7,351 crore a year ago. 

ICICI Securities highlighted that Titan has seen a time correction in the last six months. It believes it was in a zone where the valuation was stretched, expectations were high and the company had to materially surprise (for further up move). 

It noted that 3Q was a blockbuster quarter but that happened for most discretionary categories. 4Q outcome was just about decent, in fact, weaker than initially expected, the brokerage house said. 

"We cut our FY23-24 earnings estimates by ~8-12 per cent, modelling revenue / EBITDA / PAT CAGR of 19 / 24 / 27 (per cent) over FY22-24E. Retain ADD with a DCF-based revised target price of Rs 2,550 (was Rs 2,750 earlier)," it added. 

"Titan reported a relatively weaker set of numbers on the back of volatility in gold prices (wedding category saw de-growth 9 per cent YoY), store lockdowns in January due to Omicron scare, weak growth across categories as Rs 1.3 billion inventory gains in diamond were more than offset by Rs 510 million of VRS and Rs 720 million of ex gratia to employees," said Prabhudas Lilladher in its recent report. 

"We believe Titan is well placed to capitalize on long term growth opportunities led by jewellery share gains due to network expansion, regional thrust and hallmarking benefits, omni-channel strategy across jewellery, watches and eyewear, new growth drivers like Caratlane, Titan Eye+, Taneira and entry into high growth segments like wearables such as smart watches, over the head headphones and Truly Wireless earphones," it said. 

"We estimate 25.3% PAT CAGR over FY22-24 and remain positive given structural story on account of market share gains, strong balance sheet, franchisee based model and strong brand. However, valuations at 64.3x FY24 leave little room for re-rating. Reiterate BUY with DCF based target price of Rs 2,701 (Rs 2,754 earlier), with moderate returns in near term," it added. 

As per the shareholding pattern available on BSE, Jhunjhunwala and his wife Rekha together held 4,52,50,970 shares, or 5.09 per cent stake, in the company at the end of the March quarter. 

In the September quarter, Rakesh Jhunjhunwala held 3.57 crore shares, or 4.02 per cent stake, in the firm. His wife Rekha owned 95.40 lakh shares, or 1.07 per cent stake, in the firm. 

Long-term investors have made big gains by investing in this FMCG stock as it has surged around 860 per cent in the last ten years.