The share price of Titan Company declined over 2 percent after the company reported its earnings for the fourth quarter of fiscal 2021 with operating performance missing estimates.

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Titan’s Q4FY21 standalone net profit rose 48.2 percent driven by jewellery business to Rs 529 crore from Rs 357 crore, while revenue from operations grew by 61.1 percent to Rs 7,135 from Rs 4,429 crore, YoY.

EBITDA rose 31.6 percent YoY to Rs 795 crore, while EBITDA margin contracted by 250 bps to 11.1 percent, YoY.

Here’s what brokerages have to say on Titan Company’s stock and Q4 earnings:

CLSA

A negative sales mix led to margin contraction, which saw its Ebitda margin contract 250 bps YoY to 11 percent, said the brokerage.

"Amid near-term uncertainty, our estimates and target price of Rs 1,370 remain unchanged. We also maintain our Sell rating on an expensive valuation, based on 50x Mar 2023 earnings," CLSA said.

Citi

Citi said the Q4 margin was a miss and there are downside risks due to fresh COVID restrictions. The valuation caps the upsides, while the market is already factoring a sharp business recovery over FY22, it added.

Citi maintained a Neutral call with a target price of Rs 1,660 per share.

Jefferies

Jefferies said that the jewellery business led to revenue and profit growth and noted that the jewellery business gained market share while other businesses were mixed. Jefferies is of the view that FY22 is particularly tough and expects a volatile trend. It maintained Hold call with a TP of Rs 1,450.

UBS

The studded ratio improved sequentially but remained lower YoY, while the contribution of wedding jewellery sales normalised to FY20 levels, UBS said.

UBS maintained a Sell call with a target price of Rs 1,400 per share.

Morgan Stanley

The brokerage has an Equal-weight rating with a target price of Rs 1,358 per share as the company’s Q4 results were in line but a miss on margin to estimates. The management commentary is cautious on the near-term demand outlook, it said.

JPMorgan

JPMorgan said that the company’s Q4 earnings were in-line with estimates. The lockdowns put brakes on growth momentum and the higher competition and adverse mix may keep jewellery margin range-bound, it said.

The brokerage house maintained a Neutral rating with a target price of Rs 1,665 per share.

Motilal Oswal

Given the ongoing lockdown/restrictions across India, Motilal Oswal has cut its FY22E EPS estimate by 12.2 percent. While valuations of 50.6x FY23E EPS are not cheap, the long runway for profitable growth deserves a premium multiple, it said.

The brokerage maintained a Buy rating with a TP of Rs 1,785.

At 11:00 am, the shares of Titan Company were trading 1.39 percent lower at Rs 1,485.40 apiece on the BSE.

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