This Rekha Jhunjhunwala-backed Tata group company stock hits new 52-week high - what should you do?

Titan share price: Shares of Titan Company, a Tata Group-backed jewellery and accessories firm, touched a new 52-week high of Rs 2,840.60 apiece, after gaining over a per cent on the BSE. This Rekha Jhunjhunwala-owned stock has rallied nearly five per cent in the last one week on a stable business outlook.

Titan Company, a market leader in domestic branded jewellery with brands like Tanishq, Zoya, Mia, and Caratlane and wristwatch segments like Fastrack and Sonata, is a joint venture between the Tata Group and Tamil Nadu Industrial Development Corporation Limited (TIDCO).

Titan Q4 Results

In the January-March quarter of the last fiscal year, Titan posted better-than-expected revenue growth, powered by strong demand trends in the jewellery and watch segments.

On a consolidated basis, Titan’s revenue grew 33 per cent year-on-year (YoY) to Rs 10,360 crore, while profit after tax grew 39 per cent YoY to Rs 736.0 crore for the quarter ended in March 2023.

The company’s consolidated EBITDA (earnings before interest, taxes, depreciation, and amortisation) increased 37 per cent YoY to Rs 1,089 crore and the margin improved 30 basis points YoY to 10.5 per cent during the quarter under review.

Rekha Jhunjhunwala's favourite stock

Rekha Jhunjhunwala, a renowned stock market investor, has 4,69,45,970 equity shares or a 5.3 per cent stake in Titan, as per the March 2023 shareholding pattern of the company available on the BSE.

Rekha Jhunjhunwala, the wife of late stock market veteran Rakesh Jhunjhunwala, publicly holds 29 stocks with a net worth of over Rs 30,963.2 crore as of May 30, 2023, according to the stock analysis website trendlyne.com.

What should investors do?

Titan Company has outperformed discretionary peers across time periods, and the company’s outlook remains robust, domestic brokerage firm Motilal Oswal said, adding that the company has ample opportunities for growth given its market share in the jewellery segment.

The brokerage maintained a 'buy' rating on the stock with a target of Rs 3,080 per share as the firm’s medium-to-long-term earnings growth potential is unparalleled.

Another brokerage firm, Phillip Capital, said, "We continue to remain cautiously optimistic with a ‘buy’ rating on Titan shares with a target price of Rs 3,000 per share."

This is mainly due to increased competitive intensity on the gold rate front, diamond inventory gains no longer being available over FY24–25, and higher volatility in the gold price, which will eventually lead to a deferment of demand, the brokerage noted.