Titan Company Limited is an Indian company which primarily manufactures fashion accessories particularly as jewellery, watches and eyewear. The company belongs to the Tata Group and it commenced as a joint venture with the TIDCO. The company has its corporate headquarters in Bangalore and registered office in Hosur, Tamil Nadu.
Titan company established its operations in 1984 under the name of Titan Watches Limited. In 1994, the company diversified into jewellery with Tanishq and eventually into eyewear with Titan Eyeplus. In 2005, the company opened its youth fashion accessories brand Fastrack. Titan is the biggest branded jewellery creator in India with greater than 80% of their total revenues being achieved from the jewellery segment. As of 2022, Titan owns a 6% market share in India’s jewellery market. Globally as of 2019, the company is the 5th largest watch manufacturer in the world.
Quarterly Growth Walkthrough
Titan Company reported a year-on-year growth of 30 percent in its consolidated profit after tax at Rs 835 crore for the September quarter of the current fiscal year. Total Revenue from operations were reported at Rs 9,163 crore in September 2022 up 22% from Rs 7,493 crore in September 2021.
EBITDA is at Rs 1,308 crore in September 2022 which is up by 28% from Rs 1,023 crore in September 2021. EBITDA margins have risen to 14.1 percent from 13.3 percent YoY.
Titan Company EPS has grown to Rs 9.36 in September 2022 from Rs 7.20 in September 2021.
The company achieved a retail growth of 18 percent in bigger business divisions namely jewellery, watches & wearables and eyecare as compared to the last year’s festive season.
Managing Director CK Venkataraman said in a statement “Despite an uncertain macro environment, the current festive season starting from the end of September month and continuing till the end of October has been quite positive and the consumer confidence remains upbeat. We remain relentlessly focused on executing our growth plans in India and overseas and are optimistic about our performance in the remaining quarters of the current financial year.”
Segment wise Performance
The jewellery business (Tanishq) inscribed an income of Rs 7,200 crore in Q2FY23, which is up from Rs 6,100 crore in Q2FY22 (excluding sale of gold and silver), which is healthy growth of 18 percent.
The watches and wearables business (Fastrack) reported an income of Rs 830 crore, accomplishing an astounding year-on-year growth of 21 percent.
The eyecare business (Titan Eyeplus) reported a profit of Rs 170 crore, which is a year-on-year rise of 4 percent.
The company reported in an exchange filing that EBIT for the jewellery business was at Rs 1,100 crore, watches & wearables business was at Rs 123 crore and eyecare business was at Rs 28 crore.
Technical Analysis
Titan Company stock price is stuck in the distribution zone around Rs 2600 which is marked by the yellow box. The reason behind this lag is due to the failure of a breakout over the 261.8% target retracement level if we plot the retracement levels during the crash of 2020. The stock has failed to make a breakout over its lifetime high of Rs 2791 on multiple occasions. The next target retracement level of 423.6% is at Rs 3555 which the stock might take several years to achieve.
The stock price has overextended above the 200-day exponential moving average which makes the stock very expensive, however by looking at past data, the stock price rarely stays below the average. Hence the timing would be great for an entry into Titan when the price is near its 200-day average. MFI is at 54 points which gives no clear indication, but definitely tells us that the stock is giving no entry for long trades.
Titan Company has a market capitalization of Rs 230,652 crore which places itself at the 21st most valued company of India as of 30th December 2022. This is a theory, but Rakesh Jhunjhunwala passed away in August 2022 and the stock has been underperforming in the current year despite the strong rally in the NIFTY stocks in the recent months. The absence of the Titan’s major operator directly affects its bullishness?