A sharp rally in stock price has seen the market captialistation of Titan crossing Rs 2 trillion mark today. At 10:27 am; Titan was trading 8.8 per cent higher at Rs 2,335, with the market cap of Rs 2.07 trillion, as per the BSE data.
“The company witnessed strong recovery in demand after the second wave across its consumer businesses with sales moving swiftly above or close to pre-pandemic levels in most of the divisions. Most stores are now fully operational barring few in select towns having localized restrictions, with overall store operation days exceeding 90% for the quarter. Apart from its thrust on digital and omni channels, the company also accelerated its retail network expansion during the quarter,” Titan said in its quarterly update.
The demand postponement triggered by the second wave of the pandemic in avenues like gift purchases, occasions / milestone buying, weddings, investments in gold etc. witnessed a strong comeback in Q2. Both plain and studded segments grew in double digits, however a much stronger growth in the plain segment led to studded mix being below pre-pandemic levels, the company said.
Titan’s jewellery division (Tanishq) delivered yet another robust quarter with revenue trajectory coming in significantly ahead of consensus estimates. This signifies the inherent strength of the business model and its ability to gain market share in a challenging scenario. Robust performance in challenging times reaffirms our thesis of long term market share gains for Titan. Softening of gold prices (down 8 per cent QoQ) coupled with strong festive and wedding season is expected to accelerate growth trajectory from Q3FY22 onwards, ICICI Securities said in a note.
We believe Titan is a structural growth story and appears to be a key beneficiary of the unorganised to organised shift in the Indian jewellery market. We build in revenue and earnings CAGR of 22 per cent and 53 per cent, respectively, in FY21-24E, the brokerage firm said.
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