The stock closed at Rs 2,730.50, off the day’s high of Rs 2,744.30. The Nifty and Sensex ended marginally lower in choppy trades on Friday
“Titan’s second quarter update was far better than expected. Its jewellery business grew 18% versus our forecast of 5% growth, posing an upside risk to our sales growth forecasts,” said Pankaj Kumar, vice-president- fundamental research, Kotak Securities. The brokerage has an ‘add’ rating on the stock with an unchanged price target of ‘2,800 apiece.
Titan was among the most actively traded stock futures contract on Friday after the optimistic sales update as traders added fresh bullish bets. Across all expiries, open interest or outstanding positions surged nearly 15.5 lakh contracts, up 30.16% from Thursday, to 66.83 lakh contracts.
Over 55 lakh Titan shares exchanged hands on BSE and NSE on Friday, up nearly five times its average volume of nearly 12 lakh shares in the last one month.
On Friday, Titan said it expects to see an 18% year-on-year sales growth for the three months September 2022 led by the jewellery business – that contributes more than four-fifths of the overall revenue – and double-digit growth across most of the other verticals.
Titan added 105 new stores to its retail network during the second quarter and said the watches and wearables division grew 20% – clocking its highest ever quarterly revenue.
The quarterly update acts as a preview to its full-fledged quarterly earnings that will be announced in October. Its date is not disclosed yet.
“Titan will continue to gain market share as 70% of the industry is unorganised. Within the organised space, Titan has a huge headroom available compared with its peers,” said Abneesh Roy, executive director and head of research-institutional equities,
“The gifting theme made a return during the festive season that started a bit earlier than previous years and consumer discretionary spending has helped the sector,” said Roy, who has a ‘buy’ rating on the stock with a target price of Rs 3,123 per share.
Of the 31 analysts tracking the stock, 23 of them have a bullish view, while five analysts have a neutral and three analysts have a bearish view on the stock. These analysts have a 12-month price target of Rs 2,700.50, as per the median of estimates on Bloomberg.
Despite the robust second quarter update, some analysts believe the upside may be limited given its premium valuations and the Street will wait to see the actual earnings.