This Tata Group Stock Is Up 45% From Lows, “Buy” The Stock Says Prabhudas Lilladher

The Titan stock has rallied from a 52-week low of Rs 1826 to Rs 2651 and broking firm, Prabhudas Lilladher continues to maintain a "buy" call on the stock.

Titan 4QFY23: Strong revenue print but margins disappoint

According to Amnish Aggarwal - Head of Research, Prabhudas Lilladher Pvt Ltd, Titan 4QFY23 saw strong revenue print but margins disappointed. The brokerage firm has highlighted the below in its latest report.

• Revenues grew by 33.4% YoY to Rs97bn (PLe: Rs92.5bn)

• Gross margins contracted by 147bps YoY/12bps QoQ to 22.9%.

• EBITDA grew by 33.5% YoY to Rs10.4bn Margins expanded by 1bps YoY but contracted 147bps QoQ to 10.8% (PLe:12.0%)

• Adj. PAT grew by 35.4% YoY to Rs7.3bn (PLe:Rs7.6bn)

• Watches revenues grew by 40% YoY to Rs8.7bn; EBIT stood at Rs980mn vs loss of Rs100mn in 4Q22; margins expanded by 1286bps YoY to 11.3%.

• Jewellery revenues grew by 32.6% YoY to Rs86.3bn; EBIT grew by 30% YoY to Rs10bn; margins contracted by 24bps YoY to 11.6%.

• Eyewear revenues grew by 23.1% YoY to Rs1.7bn; EBIT stood at Rs20mn vs loss of Rs80mn in 4Q22; margins expanded by 718bps YoY to 1.2%.

• CaratLane clocked Revenue/ PBT of Rs5.80bn/ Rs230mn, up 59%/35% YoY.

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Titan Ltd's 4Q standalone revenue growth of 33.4% YoY was broad based across all segments and reported 4-year CAGR of 20.0% over Q4FY19. "The strong momentum continues across all key business segments helped by strong network expansion and strong consumer confidence. Miss on margins appear to have been as a result of higher gold bullion sales at Rs 10.55bn (12.2% of jewellery sales) vs 3.56bn (5.8% of jewellery sales) in 4Q22. We have a Buy rating on the stock with a target price of Rs 2956," Amnish Aggarwal - Head of Research, Prabhudas Lilladher Pvt Ltd has said in his report. The stock trades at 49.6x FY25 EPS.

The shares of Titan were last seen trading at Rs 2672 on the National Stock Exchange.

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies Pvt Ltd and the author are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision. The above article should not be construed as a buy recommendation from our end, as we have just provided information based on the brokerage report.