Rakesh Jhunjhunwala-owned Titan hits record high; zooms 30% in six months

Shares of Titan Company hit a record high of Rs 2,718.65, on rallying 5 per cent on the BSE in Thursday’s intra-day trade on expectations of strong earnings growth. The stock of the Tata Group Company engaged in jewellery and watch business has surpassed its previous high of Rs 2,687.30 touched on January 7, 2022.

Titan Company is among the top players in ace investor Rakesh Jhunjhunwala & his family’s portfolio with holding value of over Rs 12,000 crore.

As on December 31, 2021, Rakesh Jhunjhunwala (4.02 per cent) and his wife Rekha Rakesh Jhunjhunwala (1.07 per cent) collectively held 5.09 per cent stake in Titan Company, the shareholding pattern data shows. On the basis of current market capitalisation of Rs 2.39 trillion, Rakesh Jhunjhunwala and his family hold shares worth Rs 12,187 crore in the company.

In the past six months, the stock has outperformed the market by surging 30 per cent, as against 2 per cent decline in the S&P BSE Sensex. While, in the past year, it has zoomed 85 per cent, as compared to a 16 per cent rise in the benchmark index.

For the first nine months (April-December) of FY22, Titan had reported a robust 312 per cent year-on-year (YoY) jump in its consolidated profit after tax of Rs 1,671 crore. Revenue from operations grew 48 per cent YoY at Rs 20,150 crore. Earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 590 bps to 11.7 per cent in 9MFY22, from 5.8 per cent in 9MFY21.

Management expects the wedding season to be strong in the next five months and plans are in-place to push wedding sales aggressively. It is positive about the reengineered product, light-weight jewelry, which can attract more consumers and become a competitive advantage.

Network expansion should remain strong, and the company targets 30-40 store openings in jewelry. Eyewear is seeing significant acceleration, with the addition of 53 stores in Q3. The target is to reach 1,000 stores in FY23 vs around 700 currently.

“With strong growth visibility and a healthy improvement in the profitability of Eyewear/Caratlane businesses, we maintain our positive view on Titan. Potential share gains from the regionalization strategy can offer more upside,” analysts at Emkay Global Financial Services said in a Q3 result update. The brokerage maintains its bullish stance with a target price of Rs 2,900.

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