Mehabe score: 5 G Factor: 5 Piotski Score: 5 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 5.
Description
Titan Company Ltd is among India’s most respected lifestyle companies. It has established leadership positions in the Watches, Jewellery and Eyewear categories led by its trusted brands and differentiated customer experience. It was founded in 1984 as a joint-venture between TATA Group and Tamilnadu Industrial Development Corporation (TIDCO).
Main Points
Jewellery Division (83% of revenues) #
Company is the largest jewellery retailer in the country. It sells jewellery through its brands Tanishq, Zoya, Mia & Caratlane. #
Its manufacturing facilities are located in Hosur, Patnagar & Sikkim # and the division has a strong retail presence of a total of ~500 retail stores. #
The company owns 72.3% economic interest in CaratLane which makes it a majority owned subsidiary.Site:TITANMain Symbol:TITAN
Stock trades at 1763.0, above its 50dma 1646.49. It also trades above its 200dma 1464.07. The stock remains bullish on techicals
The 52 week high is at 1800.00 and the 52week low is at 941.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 30.62%
Weakness
– Stock is trading at 20.87 times its book value
Competition
– The industry trades at a mean P/E of 24.9x. Titan Company trades at the industry’s max P/E of 160.84x. TITAN trades at a P/E of 161.0x
– Industry’s mean G-Factor is 4.3 while the mean Piotski score is 7.0. TITAN has a G-Factor of 5 and Piotski scoreof 5.
– Average 1 month return for industry is -2.0%. The max 1- month return was given by Rajesh Exports: a return of 7.05 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 7494.0 cr compared to Rs 4712.0 cr for period ended Mar 2020, a rise of 59.0%
Operating Profits reported at Rs 817.0 cr for period ended Mar 2021 vis-vis 612.0 for period ended Mar 2020 .
Operating Margins contracted -208.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 6.35 compared to Rs 5.91 for previous quarter ended Dec 2020 and Rs 3.9 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 21644.0 cr for period ended Mar 2021 vis-vis sales of Rs 21052.0 cr for the period ended Mar 2020, a growth of 2.7%. The 3 year sales cagr stood at 10.3%.
Operating margins shrank to 8.0% for period ended Mar 2021 vis-vis 12.0% for period ended Mar 2020, contraction of 400.0 bps.
Net Profit reported at Rs 973.0 cr for period ended Mar 2021 vis-vis sales of Rs 1501.0 cr for the period ended Mar 2020, falling 54.3%.
Company reported a poor Net Profit CAGR of -4.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 4139.0 cr for period ended Mar 2021 vis-vis Rs -347.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 14.0% compared to 20.0% over the last 3 Years. – The stock has given a return of 74% on a 1 Year basis vis-vis a return of 29% over the last 3 Years. – The compounded sales growth on a TTM bassis is 3% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is -35% vis-vis a compounded profit growth of -5% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 18.1% vis-vis 18.59% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 17.53% vis-vis 17.3% for Dec 2020
Conclusion
– has been maintaining a healthy dividend payout of 30.62% – Stock is trading at 20.87 times its book value
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 1646.49 and is trading at 1763.0, thus bullish price action wise.
