Company's Overview
Titan Company Ltd is one of India's most prestigious lifestyle brands. Its trusted brands and differentiated customer experience have helped it establish leading positions in the Watches, Jewellery, and Eyewear categories. Its biggest portion of the revenue comes from the jewellery division followed by the watches and wearables division and the eyecare division.
Introduction
NIFTY50 went up by 1.35% on Monday 9th January, but the shares of Titan Company have underperformed and have dropped close to 1.9%. Though the overall Q3 results showed 12% YOY and the Jewellery division showed 11% YOY growth for Titan Company but still share price dropped.
Reason for Decline
Titan’s growth has disappointed investors as growth estimation was around 13.4% while the actual growth stood at 12%. This led to a decline in share price. A couple of brokerages find Titan's stock worth up to Rs 3,080 but it is currently trading at a lower price.
Peer Comparison
Titan Company Vs Kalyan Jewellers
- While Titan shares dropped at 1.9%, shares of Kalyan Jewellers went up around 6%.
- Revenue growth of Kalyan 13% which is 12% for Titan.
- The stock price rose of Kalyan 97% from last year.
- The P/E ratio of Kalyan is around 30.55 which is quite lower than the industry average of 63.44.
- The PE ratio of Titan is around 70 which is quite justified as compared to Industry.
Prospects
- Though the returns from stock were not good over the past year while a growth of more than 100% has been observed in the past 3 years.
- The company has increased its network to 111 stores in the last quarter which will lead to an increase in growth.
- Analyst believe that the earnings growth visibility remains strong, and have long-term growth potential.
Conclusion
Though the stock did not perform very well in the stock market over the past year, I still believe that it will bounce back. Investors should definitely consider this company for long-term investment as the fundamentals of the company are very strong which will lead to high growth in future. The company is constantly increasing its EPS due to which its PE has improved over a period of time. The stock is backed by investors as observed in recent years.
