Titan Company’s shares rose over one percent on May 4, a day after the jewellery, watch and eyewear maker recorded an almost 50 percent jump in its standalone profit for the January to March 2023 quarter.

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At 10:20 am, the Titan shares were trading almost a percent higher. However, brokerages see upto 21 percent upside the stock following the company’s strong performance in the jewellery segment even as watch and eyewear margin were weak during the March ended quarter.

Apart from revenue, Titan missed CNBC-TV18 poll projections on all other parameters including profit, EBITDA and margin. However, brokerage firm JPMorgan said it was a good Q4 and demand and margin narrative were better than feared. Analysts across brokerage firms suggested that the firm’s jewellery performance has raised confidence on FY24 assumptions, as the segment’s growth remained strong despite a soft March.

Goldman Sachs noted that Titan’s management has reiterated a medium-term growth trajectory of 20 percent and the franchisee margin change is targeted at improving the mix. It also believes that response to Titan’s international business is encouraging and that shall scale up rapidly in the current fiscal.

Also Read: Titan Q4 results | Profit spikes 49% to Rs 734 crore but misses estimates, declares dividend

JPMorgan pointed to comfort on demand and margin outlook for the jewellery business. The revenue for the last quarter of FY23, revenue was up 41 percent YoY for watches and wearables business, it said, adding that the EBIT margin stood at 11.3 percent with an annual target of 12-13 percent. Eyewear revenue went up 23 percent led by volume, it said.

Macquarie highlighted that Titan sounded positive about growth in the April to June 2023 quarter given recovery in late April from gold prices. However, weak watch/eyewear margin has led to a 2 percent cut in FY24/25 EPS estimates, the brokerage said, even as it maintained an outperform stance on higher FY24 jewellery margin range guide and outlook for another quarter of resilient sales growth in jewellery.

Morgan Stanley also said that the management was pleased with Q4 performance and is optimistic on future growth. It expects emerging businesses to continue to grow well.

CLSA, meanwhile, believes Titan witnessed a comprehensive growth across segments and the outlook remains optimistic. The firm also put up a strong show in other businesses that are scaling up rapidly, it said.

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