Rakesh Jhunjhunwala | Titan Inventory: Constant compounder! Time to observe the Jhunjhunwala path after Titan’s strong Q2 replace?

Shares of , the ‘crown jewel’ in late investor Rakesh Jhunjhunwala’s portfolio, had been in excessive demand right now regardless of a weak market after the Tata Group firm reported that its gross sales grew 18% YoY in Q2.

Following the quarterly replace, Titan rallied as much as 5.8% to hit day’s excessive at Rs 2,744.30.

World brokerage JPMorgan, which has maintained its chubby stance on Titan with a goal value of Rs 2,800, stated the corporate showcased income efficiency with the jewelry phase main from the entrance.

Through the September quarter, Titan added 105 shops to its retail community. “The outlook for the festive season (from Navratri in finish September 2022) continues to be optimistic and is seen in constructive client sentiment throughout classes,” the corporate stated in an alternate submitting yesterday.

Home brokerage

stated the structural funding case for Titan is unbroken with a goal value of Rs 2,970.

“Earnings progress visibility for Titan stays robust. It has compounded earnings by ~20% for an elongated time frame. Within the jewelry trade, which is organising at a fast tempo, it’s clearly on the vanguard by way of progress amongst organised gamers. Its runway for progress is lengthy, with a market share of ~6%. Not like different high-growth classes, the aggressive depth from organised and unorganised friends in jewellery is significantly weaker,” the brokerage stated.

Kotak Institutional Equities, which has an add ranking on the inventory with a goal value of Rs 2,800, stated Titan’s long run attractiveness comes from low market share (6-7%) in a big addressable market and vast hole versus competitors and concentrate on retaining its lead

The brokerage expects some upside danger to its Q2 jewelry EBIT margin estimate of 12.6%.

Within the Q2 replace, Titan stated its jewelry division grew 18% YoY on a excessive base of Q2 that had parts of pent-up demand and spillover purchases of a Covid disrupted Q1 FY22. Gold jewelry (plain) clocked low double digit progress whereas studded gross sales had been greater than the general division pushed by good activations and higher contribution from excessive worth purchases.

The watches and wearables division grew 20% YoY, clocking its highest quarterly income whereas the eyecare division additionally noticed wholesome double-digit progress YoY.

The Jhunjhunwala inventory can be a favorite of many long run buyers like Saurabh Mukherjea. Within the final 5 years, the constant compounder has delivered a return of round 335%.

Trendlyne information reveals that out of 30 analysts with protection on the inventory, solely one in every of them have a promote ranking with a majority of 16 calling it a robust purchase.

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