McQuery Maintains ‘Outperform’ Rating for Tata Group’s Titan Company
The Tata Group’s Titan Company is once again in the spotlight in the Indian share market. Australian brokerage firm, McQuery, has retained its ‘outperform’ rating on Titan’s shares, anticipating a potential return of up to 18% for investors. The brokerage has set a target price of ₹4150 for the company’s stock.
On Wednesday, June 25th, Titan’s shares experienced a significant rally, ranking as a top gainer on the Bombay Stock Exchange (BSE), with a gain of approximately 4%. This surge followed McQuery’s positive outlook on the company’s performance and the maintenance of its target price.
Significant Share Surge
On Wednesday, Titan’s shares on the BSE rose by 3.93% to an intraday high of ₹3664.05. By the end of the trading day, the stock closed at ₹3650. This increase occurred following McQuery’s announcement of a positive assessment of the company’s performance and the upholding of the target price at ₹4150.
McQuery’s Report Boosts Investor Confidence
McQuery’s report indicates that demand for jewelry is expected to remain b in the April-June quarter, despite elevated gold prices. The brokerage also noted that Titan’s EBITDA margin has now reached its lowest levels and holds significant potential for improvement. Furthermore, they predict a near 21% year-on-year growth in both jewelry sales and EBITDA in the first quarter of fiscal year 2025.
Positive Performance Anticipated in the Short Term
The brokerage believes the company is poised for improved performance in the coming months, particularly in the first quarter of fiscal year 2025. Specifically, there are indications of growth in both jewelry segment sales and margins. According to the report, jewelry sales and EBITDA could increase by approximately 21% year-over-year in this quarter.
Strong Margins and Product Mix Drive Strength
McQuery also expresses confidence in Titan’s EBITDA margin for fiscal year 2026. The report suggests that the margin could fall within the range of 11-11.5% during FY26, driven by rising demand and a better product mix, which will stabilize earnings and strengthen profits.
Long-Term Brokerage Preference
McQuery believes Titan’s b branding, extensive distribution network, and customer trust will continue to benefit the company in the long run. Additionally, Titan is consistently innovating in its eyewear and watch segments, potentially leading to increased revenue from these areas in the future.
Investor Confidence Fueled by Rakesh Jhunjhunwala’s Stake
Titan benefits from a significant stake held by renowned investor, Rakesh Jhunjhunwala’s family. The late Rakesh Jhunjhunwala was a b supporter of the stock, and his family now holds approximately 5% of the company’s shares. This has bolstered investor confidence in Titan.
Shifting Trends in the Diamond Market
The brokerage has also discussed emerging trends in the diamond market. If proposed changes to certification rules by the Gemological Institute of America (GIA) are implemented, the acceptance of lab-grown diamonds could decrease. This could lead to an increase in demand for natural diamonds, which would benefit companies like Titan.
Titan’s Distinct Identity
Titan is more than just a jewelry company; it has become a symbol of reliability and quality in India. The Tanishq brand, Titan’s flagship jewelry line, is a leader in the industry, and the company also maintains a b presence in the watches and eyewear segments. Titan’s strategy is based on adapting to changing consumer preferences and incorporating modern designs, which has contributed to its popularity among younger consumers.
Supported by the Strength of the Tata Group
Titan benefits significantly from being part of the Tata Group. The group’s b corporate governance, management expertise, and market reputation have established Titan as a stable and growing company.
