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.
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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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