Shares of Titan Company Ltd. rose as much as 25 percent, the most in 12 years, to Rs 824.65 after the jewellery-to-watch maker reported quarterly earnings that beat street estimates.
Net profit jumped 67 percent to Rs 278 crore compared to that a year ago, according to the company's statement. Revenue rose 29 percent year-on-year to Rs 3,473 crore aided by a 37 percent jump in jewellery sales. Titan's top line was also aided by revenue from the watches segment which rose 9 percent on a year-on-year basis.
The management told marquee investor Rakesh Jhunjhunwala that sales in November and December are likely to be better this year.
Here's what brokerages had to say about Titan post second quarter earnings
Credit Suisse on Titan
- Maintained ‘Outperform' rating; hiked price target to Rs 760 from Rs 635
- Previous quarter's jewellery margins surpassed massively- the highest ever clocked by the business.
- Market share gains to continue for Titan as local players on the back foot.
- Revenue guidance in the current financial year for jewellery maintained at 25 percent Which now needs only 11 percent growth in the second half.
Macquarie on Titan
- Maintained ‘Outperform' rating; hiked price target to Rs 907 from Rs 700.
- Margin expansion of 260 basis points in jewellery more structural.
- Expect 30 percent growth in the current the current financial year, which requires 19 percent growth in the second half.
- Positives: higher momentum in wedding, high value diamond jewellery and favourable base.
- Raised earnings estimate for the financial years till March 2020 by 17-18 percent on account of higher jewellery sales and margin.
UBS on Titan
- Maintained ‘Buy' rating; hiked price target to Rs 810 from Rs 750.
- Strong jewellery volumes in the previous quarter; Operational margin de-coupling from studded growth.
- Success of higher value gold designs is a key change.
- Titan can re-rate given superior volume growth potential, higher revenue growth visibility and renewed strategy to emphasise on regional wedding jewellery.
- Previous quarter also showed indicative of improved trajectory from other business segments and allay concerns of them being a drag on the core business.
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