Shares of India's Titan Limited, the country's biggest listed company in the jewllery and watches segment, have moved up sharply on rating upgrade by many brokerages and are moving closer to 52-week high.The company did not have a good first half this financial year, but the second half holds promise for the company is the management's views are any indication.
In the last four years, Titan logged single-digit sales growth, but the company has now issued guidance for a 20% compounded growth. Recently, the company's Chief Financial Officer reportedly said that the company may see a near 25% growth in the second half and added that they did not anticipate a slowdown in 2017, a year in which the entire industry was struggling.
The company is reportedly looking for a larger share of the jewellery market, aiming to expand growth to 50% in the wedding jewellery segment.
The major chunk of the company's revenues come from jewellery. The watches segment is slowly improving thanks to better product offerings and online retailing.
Compared to other big names in the consumer segment, such as Britannia Industries, HUL, Dabur India and Godrej Consumer Products, Titan is relatively cheaper, trading at slightly higher than 35 times its FY 21 earnings. The other majors cited above are currently trading at 40 - 42 times their FY 21 earnings.
The stock, which rose to Rs 999.70 in mid-April, dropped to around Rs 732 by early October, but has come up pretty sharply since then.
The stock has gained marginal ground in positive territoy at Rs 929, after having advanced to Rs 939 earlier in the session. On Friday, the stock gained more than 4%.
Brokerages have raised the target price for the stock to somewhere between Rs 940 - Rs 960, but more upside for the stock - a move past four-digit - looks very likely.
from Sify.com
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