Buy Titan Company; target of Rs 2915: Prabhudas Lilladher

Buy Titan Company; target of Rs 2915: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Titan Company has recommended buy rating on the stock with a target price of Rs 2915 in its research report dated January 06, 2022.







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January 07, 2022 / 01:38 PM IST





Prabhudas Lilladher's research report on Titan Company

We are increasing FY22/23/24 EPS estimates by 10%, 5.8% and 6.5% to Rs25.6/33.4/42.2 and increase DCF based target price to Rs2915 (Rs2651 earlier). This follows stronger than expected 3Q jewellery sales growth even as watch and Eyewear sales are slightly lower than our expectations. we believe 37% jewellery sales growth (~45% volume growth) shows the benefit of low gold prices, busy marriage season, hallmarking, higher walk ins and 15% increase in ticket size than pre covid levels. Watch sales bounced back led by Titan brand in Tier2/3 cities while Eyewear business growth was led by sunglasses and frames. We note that Tanishq sales are far better than our channel checks which suggested industry growth of ~20%, suggesting market share gains.

Outlook

We estimate 50.7%/28.3% PAT CAGR over FY21-24/FY22-24 and arrive at a DCF based target price of Rs2915 (Rs2651 earlier). We believe structural story remains intact led by