Titan’s mainstay witnessed a surge in their jewellery revenues by 109% year on year. Titan, on a standalone basis, stated a whopping profit at the Ebitda level of Rs144 crore against the loss of Rs246 crore in Q1FY21 in the ongoing pandemic phase.
According to the data published by Bloomberg, the admissible issue for Titan’s investors is related to the expensive shares’ valuations. The expansion rate for the company is limited, however, the stock trades at 63 times the targeted earnings for FY 2021.
On August 4, an analyst from Jefferies India Pvt. Ltd reported that “We find the stock fully valued at current valuations and retain Hold (rating).” The broker from the National Stock Exchange added, “We raise our FY22-24 earnings estimates by 3-10% to factor in stronger 1Q and management commentary on store operations.”
Approaching towards the June quarter, Titan’s sales took a small jump just before the shops closed on a temporal basis on the third week of April. However, the company’s operating revenues have magnified tremendously on a year-on-year basis to Rs2780 crore. For instance, revenues in the March and December quarter stood at Rs6900 crore.
Interposing on Titan’s profitability figures on the jewellery segment, JM Financial Institutional Securities Ltd said, “We found it quite surprising for a business that has been clocking around 12% steady-state margin to still be able to earn 8.4% when topline is around 60% below more ‘normal’ levels.” In relation to the previous year’s sales, Titan’s watch business witnessed a gush in earnings before deducting interest and tax (Ebit) losses.
Nevertheless, of the outpouring profits, analysts believe in the growth opportunity for Titan in the coming days. As stated earlier, share valuations are not cheap, rather it simplifies a good share of the optimism.