Titan: The Tata Stock Backed by Rakesh Jhunjhunwala Is A Gem, Returning 290% Over Five Years With More Gains to Come!

According to the regulatory filing, Titan’s revenue increased by 22% year over year in Q3FY24. During this time, the business added 90 new shops, bringing its overall retail footprint to 2,949 locations.

A small increase in average selling prices and double-digit buyer growth drove the jewelry division’s c.21% YoY domestic growth. Due to increased consumer interest in gold despite high prices and volatility, gold (plain) and coin sales growth this holiday quarter significantly outpaced studded sales growth.

Additionally, the domestic business of its Watches & Wearables (W&W) Division expanded by c.23% YoY, with c.18% of the rise coming from an increase in revenue from analog watches and c.64% from wearables. However, YoY revenue for the EyeCare Division decreased by c.3%. With no net additional additions during the quarter, Titan Eye+ established two new locations in the GCC, one in Dubai and one in Sharjah.

Additionally, Caratlane’s Revenue increased by around 31% YoY, driven by the first-ever “mangal sutra” campaign, wedding giving ideas, and the season’s new collections. The studded section had strong growth, with a YoY gain of over 39%. During this time, Business opened 16 additional domestic locations, bringing its network reach to 262 locations.

Based on information from Trendlyne, investors have dubbed Rakesh the Warren Buffett of India. He first purchased Titan shares over ten years ago. During the December quarter of 2015, Jhunjhunwala selected 16,791,575 shares or 1.89% of Titan shares. Since he made significant changes to Titan shares while he was still living. Rekha, his spouse, is Titan’s largest public shareholder after him.

Rekha owns 47,695,970 equity shares, or 5.4% of Titan, as of December 31, 2023. The most valuable stock in Jhunjhunwala’s holdings is this one. Titan stock accounts for the lion’s share of her net worth. Rekha’s stake in Titan is valued at more than Rs 18,051 crore as of January 20, 2024.

Therefore, Titan keeps making money for Jhunjhunwala in spite of short-term or sporadic performance setbacks. Titan is a stock that may increase in value over time.

Titan is still a valuable asset since there is room for growth.
Following the Q3 operating results, Sharekhan said, “Titan is targeting a revenue CAGR of over 20% during FY2022-FY2027, driven by an ambitious medium-term growth plan.” Although there will be an immediate blow to margins, long-term margin increase is anticipated along with better mix.”

Sharekhan’s letter went on to say, “It’s the best play in the discretionary space due to its strong growth outlook, focus on sustained market share gains, and strong balance sheet.” At the moment, the stock is trading at 46x and 40x its respective FY2025E and FY2026E EV/EBITDA. With a revised price target (PT) of Rs. 4,112 (rolling it over FY26E results), we continue to advocate buying the stock.

According to Sharekhan’s report, two major risks to their profit predictions are erratic gold prices and a downturn in important business verticals.

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