Amazing stock, gave 10 times return in 10 years, should you invest money in Titan Company now or not

Titan Stock Price :Titan Company is one of the prominent multibagger stocks in the market. The stock has proven to be a return machine for investors in the long term. In the last 10 years, the stock has given a 10-fold return and it has grown from Rs 350 in June 2014 to Rs 3500 at present (Titan Stock Price). Brokerage houses are positive about the company’s growth outlook as well as the stock. They say that even though the stock’s valuation is expensive, its pace is not going to stop for the time being. In the coming days, the stock may cross Rs 4300 (Titan Target Price).

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Centrum: Revenue growth potential

Brokerage house Centrum has recommended buying Titan Company and has given a target of Rs 4337. The brokerage says that we are excited by the operating performance of Titan Company due to strong demand in the business segment. Its presence in the international market looks promising. The brokerage believes that Titan Company’s strategy revolves around serving millennials, meeting their needs with new designs and channel introductions. Nevertheless, the increasing share of wedding jewellery can benefit a lot.

The turnaround in Caratlane, W&W and eyewear divisions and the sustainability of their profitability potential need to be monitored. Despite a stable margin outlook, the brokerage has lowered FY25E/FY26E earnings by -1.5%/+1.1%. However, irrational competition from regional players, subdued demand due to prolonged economic recovery and higher gold prices are some of the factors that are expected to drive the recovery.

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Motilal Oswal: What are the reasons for the stock to rise

Brokerage house Motilal Oswal has also recommended buy on Titan and has a target price of Rs 4000. With competitive pressure, Titan Company is reducing the gold premium compared to its competitors, and is also exploring options to protect operating margins (such as reducing making charges).

The company’s diversified portfolio inspires confidence in sustaining healthy growth along with structural drivers such as: 1) expanding target users in growing urban cities and store network potential, 2) expanding Titan Company customer base (new buyers contributing 45-50%), 3) multiple jewellery brands catering to the needs of consumers across income groups, 4) rapidly changing consumer preferences (transitioning from unorganised to organised market), 5) further potential to gain market share (currently 8%), and 6) increasing number of women and youth entering the workforce.

The brokerage says that we model 17%, 20% and 22% revenue, EBITDA and PAT CAGR during FY24-26. Titan’s valuation is expensive, but its superior competitive position (sourcing, studded ratios, consumer trust, youth-centric, reinvestment), and business prospects make it a preferred stock.

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How were the company’s quarterly results

Titan Company’s profit fell by about 7 percent year-on-year to Rs 786 crore in the March quarter. The company’s net sales grew 17 percent year-on-year to Rs 10,047 crore, from Rs 8553 crore in the same quarter a year ago. EBIT grew 8 percent year-on-year to Rs 1139 crore in the March quarter, while EBIT margin fell 95 basis points to 11.1 percent. The company board has announced a dividend of Rs 11 per share for the financial year 2024.

(Disclaimer: Investing or selling stocks is advised by experts and brokerage houses. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)