Titan shares hit a record high of Rs 2,347 on BSE, up 9.32 per cent, early Thursday. That made the market capitalisation of the jewellery maker to jump by Rs 17,770 crore within few minutes into trading.
Jhunjhunwala and his better half Rekha together owned 4.81 per cent stake in the Tata group company, and they saw the value of their stake rise by Rs 854 crore.
Titan commanded a m-cap of Rs 2,08,350 crore intraday, at which Jhunjhunwalas’ stake in the Titan group company was worth over Rs 10,000 crore!
The jewellery maker’s September quarter business update showed most segments were back to the pre-Covid levels, raising hopes of a strong festive season ahead.
The jewellery business clocked a strong 78 per cent YoY growth, with the Tata group company adding 13 stores to take its store count to 414 during the quarter, Titan said during post market hours on Wednesday.
Growth for the eyewear segment came in strong at 74 per cent while that of watches and wearables segment showed a 74 per cent recovery. Other businesses recorded a 121 per cent growth, Titan said in a BSE filing.
The company witnessed strong recovery in demand after the second wave of Covid-19 across its consumer businesses with sales moving swiftly above or close to the pre-pandemic levels in most of the divisions, Titan said.
“Most stores are now fully operational barring a few in select towns that still have localised restrictions, with the overall store operation days exceeding 90 per cent this past quarter. Apart from its thrust on digital and omni channels, the company also accelerated its retail network expansion during the quarter,” the jewellery maker said.
Emkay, which had a target of Rs 2,000 on the stock (lower than the prevailing price), has raised its target on Titan to Rs 2,530, valuing the stock at 65 times September FY23 EPS compared with 55 times earlier. The target suggests 18 per cent potential upside.
“Titan’s Q2 business update highlights a robust recovery and a strong performance across divisions, with the jewelry division reporting a two-year CAGR growth of 32 per cent. Network expansion was also accelerated during the quarter. Full unlocking and the forthcoming festive/wedding season are likely to further boost revenues in the coming quarters and may offer more upsides, in our view,” it said while upping its FY23 and FY24 EPS estimates by 8-12 per cent.
Motilal said Titan’s sales growth in the jewellery segment was outstanding.
“Even on a two-year basis, it has delivered a 32 per cent sales growth CAGR, which is phenomenal. This performance was driven by stable gold prices over the past few months, pent-up demand, continued
tailwinds in favor of organised players, robust consumer sentiment, and advanced wedding purchases,” it said.
Motilal said stability in gold prices at around Rs 47,000 per 10 gm, off 15 per cent from the peak levels of Rs 55,000-56,000 in August 2020, bodes well for consumer demand in the near term.
With upbeat consumer sentiment, festive demand is likely to remain robust, it said but expected margin to be impacted in the September quarter due to lower contribution of studded jewellery. The brokerage has a target of Rs 2,460 on the stock.
JP Morgan has a ‘neutral’ rating on the stock with a target of Rs 2,320. It said a solid Q2 revenue beat will drive EPS upgrades. The jewellery business witnessed faster-than-expected growth while the watches segment is back to near pre-Covid levels, it said.
