Titan Company shares hit all-time high as CLSA sees 20% upside; here's why the brokerage is bullish

Titan share price BSE: Titan shares in trade on Friday (January 19) marked a new all-time high of Rs 3,860 apiece on the BSE, after rallying over 3 per cent in intraday trade. The company's market cap has scaled to Rs 3.4 lakh crore.

The jewellery-to-watch consumer company's stock was shining as the global brokerage CLSA maintained a buy on the stock with a target price of Rs 4,494. This implies a potential run of another 20 per cent from the last close, even as the scrip has delivered a decent return of 60 per cent over the past 12 months.

The brokerage has given a buy rating on the stock after analysing the company’s pricing power for Tanishq's relative peers. CLSA mentioned that the company’s making charges scale with product prices as a percentage of the product price. This demonstrates Tanishq’s pricing power, especially at the premium end. In comparison, most other large competitors see making charges fall with rising product prices, an indication of lower pricing power.

Tanishq’s focus on design, consumer trust, and customer service allows the brand to charge a significant premium. This is reflected in higher operating margins and returns, the brokerage noted.

Rekha Rakesh Jhunjhunwala, the wife of deceased ace investor Rakesh Jhunjhunwala, owns a substantial 5.37 per cent stake in the firm as of the December-ended quarter, according to the BSE data.

The consensus recommendation on the counter from 30 analysts on the stock is ‘hold’, Trendlyne data shows.