The TATA subsidiary company, Titan recorded a significant decline of over 7.18% in it’s share prices during BSE intraday trade after it released its Q4 results, which turned out to be weaker than expected.
Titan Company’s Q4 Performance
Titan’s March quarter results were declared on Friday, May 3rd. A 5% Year-on-Year (YoY) rise was recorded in consolidated net profit of Rs 786 crore for the fourth quarter that ended on March 31, 2024. This was lower than the estimates of rs 830 crores made by analysts.
A YoY revenue growth of 17% was also recorded but was short of 43 crores, when compared to the estimates. The company’s EBITDA or Earnings Before Interest, Tax, Depreciation and Amortisation rose 6% to ₹1,109 crore, again lower than the estimate of ₹1,250 crore. EBITDA margin also saw contraction of 90 basis points to 9.9% from 10.8% last year.
A recommended dividend of rs 11 per equity share will be paid on or after the seventh day from the conclusion of the 40th Annual General Meeting, at the discretion of the Company’s stockholders.
Market analyst Sandeep Sabharwal highlighted the sudden volatility in the market, signaling caution. The past performance of the company in the quarterly reports have been quite disappointing, as they are suffering from a stunted growth trajectory. According to him, “it seems quite overvalued given the near term growth prospects.”
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Company’s Shares
The company’s declining quarterly results have lowered the confidence of its investors.
On Monday, Titan shares plunged by 7.18% on the Bombay Stock Exchange. The day’s open was recorded at Rs. 3481, less than the previous close at Rs 3535, with day’s high at rs 3485 and day’s low at Rs 3257.
Top Brokerages Reaction
Kotak Institutional Equities- Kotak has adjusted a cut in the target price from Rs 3750 to Rs 3600, followed by a reduction in the EBIT margin estimate(90-110 bps slash) and EPS estimates(5-8% cut).
Motilal Oswal – Motilal Oswal Financial Services maintained a buy call on Titan stock, at a target price of Rs 4,100. It emphasized Titan’s position as its top consumer discretionary play in India but revised its earnings per share (EPS) estimates downward by 6% and 5% for FY25E and FY26E, respectively
JM Financial- this brokerage company believes that Titan will remain committed to maintain its positive momentum trajectory growth in the jewelry division for FY24 with a margin guidance of 12-13%. It stuck to its buy call on the company but revised its target price downward to Rs 3,825 from Rs 3,940.
