Titan share price gained over 2% in early trade on Friday as brokerages raised target price on the stock after the company reported its Q3 results.
Titan Company posted a net profit growth of 9.4% YoY at ₹1,040 crore in the third quarter of FY24. The company’s revenue from operations in Q3FY24 increased 20% to ₹13,052 crore from ₹10,875 crore, YoY.
EBITDA during the quarter ended December 2023 rose 9.5% YoY to ₹1,457 crore, while EBITDA margin contracted by 100 basis points (bps) to 11.2% from 12.2%, YoY.
Jewellery segment’s total Income for the quarter grew 23% over Q3FY23 to ₹11, 709 crore, while the segment’s EBIT was at ₹1,432 crore with a margin of 12.2% for the quarter.
During the quarter, jewelry sales were impacted by Shradh month in October and a slowdown in December due to an increase in gold prices. However, the company’s management is confident of reporting better growth in 4QFY24 compared to 3QFY24, as January 2024 has witnessed recovery in jewelry performance.
Titan’s Q3 margins missed most brokerages’ estimates, but analysts remain optimistic about the company over the medium to long term led by strong demand across business and international expansion. Analysts also raised target price on the stock. Here’s what brokerages said on Titan Q3 results and Titan shares:
Antique Stock Broking
Titan’s Q3FY24 profitability was marginally below Antique Stock Broking estimates, largely due to a contraction in the jewelry margin. Jewelry EBIT margin contracted by 46 bps YoY to 12.1% due to a drop in the contribution of studded jewelry, higher promotions, and marketing spends.
“Overall, we remain optimistic about the company over the medium to long term. We understand that structurally it is moving in the right direction of targeting jewelry sales of ₹600 billion by FY27 and gaining market share across geographies (including the South)," said Antique Stock Broking.
Post Q3FY24 performance, the brokerage cut its FY24 estimates by 8% factoring lower profitability while broadly maintaining FY25/ FY26 estimates. It maintained a ‘Buy’ recommendation and raised the target price to ₹4,100 from ₹4,092 earlier.