Titan Company shares surged nearly 1 percent Thursday after brokerages maintained 'buy' rating on the jewellery stock, estimating an 18 percent upside. Motilal Oswal has a target price of Rs 2,830 on the stock, up 17.8 percent from Wednesday's closing price.

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"Jewellery outlook remains good as well, given the healthy festive season commentary ... It has a strong growth runaway, given its market share of <10 percent and the struggles faced by its unorganised/organised peers," Motilal Oswal said in a note.

The brokerage said Titan's medium to long term earnings growth opportunity is "the best-of-breed" with earnings per share (EPS) compound annual growth rate (CAGR) of 24 percent over the past three years before the covid impact in FY21. It expects the company to maintain this growth over FY20-24. EPS CAGR shows the cumulative average growth rate during the performance period of diluted earnings per share.

Titan's sales for the second quarter of FY22 rose by 64.6 percent at Rs 74.9 billion, in line with the brokerages' expectations. It surpassed expectations by posting a 12.9 percent rise in operating margin, the second-highest level since second quarter of FY06, Motilal Oswal said. "This led to EBITDA and PAT surpassing our estimates by more than 20 percent," it added.

"What was even more remarkable was this margin improvement was achieved in a quarter that still did not see the contribution from studded jewellery returning to normal levels and witnessed low margin bullion sales as well," the brokerage said. The sharp increase in sales is likely to have helped the jewellery company, it said.

According to the company's management, Titan is witnessing "market share gains across every region and city" and that the "industry also saw good growth in recent months," the note said. Titan has performed better than the industry, it said.

In terms of stock price, in the past year, the stock has risen over 55 percent, matching the sector's returns of 55 percent. Meanwhile, Sensex has risen over 20 percent. At the last count, the Titan shares were up over 0.65 percent to Rs 2,417 and Sensex was up over 0.2 percent to 57,917.

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