Its preferred stock pick within the consumer Discretionary space is Titan Company as it expects it to outperform as it has registered a breakout above a falling channel containing last three month’s decline, signalling resumption of the up move, thus offering a fresh entry opportunity.
“Buying demand is seen emerging in then stock from the support area of ₹1,800-1,900 as it is confluence of rising 100 week’s EMA, which has historically acted as strong support in the last decade and the 61.8% retracement of the previous major rally of May 2021 to October 2021 ( ₹1,400-2,677) signalling overall positive structure," the note stated.
The brokerage expects Titan shares to continue its current positive momentum and head towards ₹2,480 (target price) with stop loss of ₹2,045 and time horizon of three months.
“Titan's jewellery division (85% of revenues) has recorded an impressive 17% revenue CAGR during FY18-22 whereas overall industry during the same period has shown zero to marginal growth. Sustained market share gains without compromising on the balance sheet strength (FY22: RoCE 33% , cash & investments: ₹1500+ crore) has led to P/E multiple expansion over the last couple of years," ICICI Securities highlighted.
Estimated revenue CAGR of 20%, 30% in FY22, FY24E, respectively, coupled with healthy RoCE (33%+) makes Titan one of the best compounding stories. The management also unveiled its ambition on the watches and wearables business, targeting revenue of ₹10,000 crore by FY26 and an EBIT margin of 18%. Titan is a structural growth story and appears to be a key beneficiary of the unorganised to organised shift in the Indian jewellery market, it said.
As per the recent shareholding pattern on the BSE, Indian ace investor and stock market trader Rakesh Jhunjhunwala and and his wife Rekha Jhunjhunwala hold 3.98% and 1.07% stake respectively in the Tata Group company.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
