Titan Company set to join Rs 1-trillion market cap club; hits new high

Shares of Titan Company hit a new high of Rs 1,112, up 2.5 per cent, in intra-day trade even as the firm is set to join the elite club of Rs 1-trillion market capitalization (market-cap) on the BSE. The stock surpassed its previous high of Rs 1,096 touched on Tuesday, March 12, 2019.

The market-cap of Tata Group Company hit Rs 98,800 crore in intra-day trade on Friday till 10:01 am. Currently, there are 27 listed companies having market-cap of more than Rs 1 trillion, BSE data shows.

In past five months, the stock of Titan Company has outpaced the market by surging 37 per cent, as compared to 9 per cent rise in the S&P BSE Sensex.

Titan will continue to benefit from the shift of demand in jewellery retail from unorganized to organized segment post demonetisation and implementation of Goods and Services Tax (GST) as seen from strong year-on-year revenue growth for nine straight quarters ending December 2018 leading to market share gains.

The company reported strong growth of 41.6 per cent in net profit of Rs 416 crore in the December quarter (Q3FY19) on the back of healthy performance in jewellery segment. The company’s jewellery business reported a robust 37 per cent sales growth led mainly by grammage growth of 20 per cent. The segment benefited from strong growth in both the plain and studded jewellery. The plain jewellery segment was driven by a large institutional order of Rs 200 crore.

CRISIL have a ‘positive’ outlook on the long-term bank facilities of Titan Company. The outlook revision reflects improving business profile over the medium term on account of improving business performance in the retail jewellery segment, supported by healthy annual store additions and better diversity in terms of revenues and profitability.

Over the last two years, Titan has also increased its pace of store additions in the jewellery segment from around 10-20 stores per annum to 30-40 stores annually and the same trend is expected to be maintained. This, coupled with its already strong store network of 267 Tanishq, 25 Mia and 45 Caratlane stores, will further augment the company's market position in India, CRISIL said in December 2018 rating rational.

Analysts at Prabhudas Lilladher have ‘buy’ rating on Titan Company with target price of Rs 1,195.

“We maintain positive stance on Titan post 3Q results given the guidance of 22 per cent jewellery sales growth and the opening of 40 Tanishq stores in FY19, expected gains from backward integration and proactive strategy in Eyewear and success of new collections in watches. The quarter to date sales in Q4 grew by around 18% and is expected to grow faster on higher number of wedding dates in Q4FY19 and Q1FY20,” the brokerage firm said in result update.