Tata Group‘s fashion and lifestyle products retailer Titan reported its standalone profit after tax at Rs 777 crore for the quarter ended June 2023. Its quarterly revenue jumped 19% YoY to Rs 10,306 crore. Both figures were below the Street estimate. During the quarter, the company’s margin fell 239 bps to 9.9%.
While seasonality and muted discretionary spending took the sheen off the April-June quarter performance, British brokerage HSBC backed the stock with a buy rating. Motilal Oswal relies on its ‘impressive’ track record while suggesting a buy rating. Meanwhile, Nuvama called it one of its top picks in discretionary spending space. The brokerages estimate an 11-20% upside. Meanwhile, HDFC Securities initiated a ‘Reduce’ rating.
Here is what brokerages said about the Titan stock:
HSBC: Buy | Target: Rs 3,580
Notwithstanding the margin miss which HSBC called “tactical”, the brokerage maintained a ‘Buy’ on the stock with a price target of Rs 3,580. It remains bullish on the Tata Group stock and relies on its “winning jewellery business” and strong growth outlook.
A double-digit growth was seen in many of its business divisions. The company is on track with respect to scaling-up of its international jewellery business.
Motilal Oswal: Buy | Target: Rs 3,325
Titan’s impressive track record of outperforming its peers as well as exceptional long-term growth potential justifies its premium valuations, Motilal Oswal said in its post-earning review of the stock. Reiterating its ‘Buy’ rating for a price target of Rs 3,325, the stock is valued at 60X FY25E EPS.
Titan Company’s Q1FY24 revenue was ahead of Motilal’s expectation though, PAT missed its estimates on lower-than-expected margins, EBITDA. Seasonality, volatility in gold prices, and a one-time diamond price inventory gain in 1QFY23 were reasons for the company’s misses on these crucial parameters.
Nuvama: Buy | Target: Rs 3,425
Titan remains a valued ‘Buy’ for Nuvama which has valued the stock 60X Q1FY26E PE (5Y average) for a target of Rs 3,425. Margins were missed on muted consumer sentiments rather than competition as highlighted by the company.
HDFC Securities: Reduce | Target: Rs 2,600
HDFC Securities cut its FY24/25 EPS estimates by 3% each and maintains its ‘Reduce’ rating with a Discounted Cash Flow (DCF)-based target price of Rs 2,600 implying a 49X September-25 P/E.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)