Shares of Titan Company on Monday rallied as much as 24.9% on the BSE during the day after the company reported a 67% increase in consolidated net profit for the second quarter. The stock ended 18.98% up at Rs 784.55. On NSE, shares of the company jumped 18.78% to close at Rs 783.70. The stock scaled to a fresh life-time high and closed at Rs 784.55 on Monday propelling its market capitalistion to Rs 69,651 crore – making it the 45th largest Indian firm based on market valuation.With Monday’s surge, Titan has surpassed the market capitalisation of other FMCG majors like Godrej Consumer Products and Dabur India. While the topline of the company rose 30% y-o-y to Rs 3378.5 crore, the operating profit expanded 55% in the quarter ended September 2017, on the back of healthy 36% revenue growth in the jewellery segment. The net profit of the company rose 70% to Rs 305.6 crore during the quarter. Analysts were quick in revising their target price for Titan with nine of the 30 analysts tracking the company on Bloomberg upgrading the stock post the Q2 results. While 86.7% recommended a ‘buy’ on the stock, only three suggested a ‘sell’.
Morgan Stanley believes the September quarter margin expansion is likely to be sustained. The brokerage expects a 40% upside in the stock price.
“It’s all coming together – market share gains, product mix improvement, operating leverage, GST-led cost efficiencies, and confident management commentary,” said Morgan Stanley in a note to investors, adding that even the watch business is past the trough.Foreign brokerage Citi which has a “buy” rating on the stock stated: “We see Titan emerge as an early winner of the increased formalization of the economy gaining share from smaller/unorganized players, both in jewellery and watches.”