Titan Plans to Raise Funds Through NCDs

In an official filing to the BSE on October 10, Titan Company announced that its Board of Directors is scheduled to meet on October 17 to deliberate on the possibility of issuing Non-Convertible Debentures (NCDs). Titan's excellent performance in the second quarter has caught the attention of investors. Because of this, major brokerage firms have issued 'buy' recommendations for Titan's stock, which reflects a positive view of the company's future.

Titan's Q2 Performance

Retail Expansion: During Q2, Titan added 81 new stores to its retail network. This indicates a continuous effort to grow its presence in the retail sector, and the total retail footprint, which includes CaratLane, reached 2,859 stores by the end of Q2FY24.

Jewelry Division: Titan's jewelry division surged by 19% year-on-year, the surge was driven by studded activations, the launch of new collections, robust Golden Harvest sales, a thriving wedding season, and substantial high-value studded purchases. The segment maintained a strong 3-year/4-year revenue compound annual growth rate (CAGR) of 27%/21%. 

Watches & Wearables Division: Titan's Watches & Wearables division recorded a strong growth of 32% year-on-year. Analog watches saw a 22% growth, while wearables grew an impressive 131% year-on-year growth, largely driven by the mid-to-premium watches segment.

Eyecare Division: Titan's eyecare division is expected to achieve revenue growth of 12% year-on-year.
 

CaratLane's Success: CaratLane, a brand under Titan, demonstrated 45% year-on-year growth. Primarily due to studded sales, new collections, gifting campaigns, and 'old gold' exchange program initiatives. During the quarter, 13 new domestic stores were added, expanding the brand's network to 246 stores in 97 cities.

Brokerage Recommendations: Well-known brokerage firms are quite positive about Titan's stock, as they've officially recommended buying it.

HSBC maintained a 'buy' call on Titan's stock and raised the target price to Rs 3,900. They said Titan's sales surpassed, what the market had expected, and the company excelled in various divisions, especially in the watches and wearables segment.

Goldman Sachs issued a 'buy' recommendation with a target price of Rs 3,425. Despite second quarter delivered strong results, particularly in the jewelry business, which saw a 19% revenue growth.

Morgan Stanley rated Titan as 'overweight' with a target price of Rs 3,190. They highlighted that Titan did exceptionally well in the second quarter with 20% year-on-year growth. The jewelry segment, in particular, maintained a 25% growth rate over the past four years, outperforming historical trends.

Titan Q1 Result: On August 2, Titan Company announced its financial results for the June quarter of FY24, and reported a consolidated net profit of Rs 756 crore, showing a 4.3% decrease from the same quarter in the previous financial year from Rs 790 crore. However, there was a 2.7% increase in profit compared to the previous quarter.

consolidated revenue for this quarter was Rs 11,897 crore, indicating 25.97 percent growth compared to the same quarter in the previous year, from Rs 9,443 crore. Additionally, the revenue increased by 14.83% from the previous quarter from Rs 10,360 crore.

Conclusion

Titan's stock has done exceptionally well, with a 27% return in the past six months and a 25% rise in the past year. But the real standout is the 307% return it has delivered over the past five years, showing strong long-term performance.

Titan Company's exceptional Q2 performance, combined with its expanding retail presence and positive recommendations from leading brokerage firms, solidified its position in the market. Despite the broader market challenges, Titan continues to shine in the jewelry and watch industry, making it an attractive investment choice.