Select analysts give ‘sell’ rating to Jhunjhunwala’s favourite stock post Q1 result; here’s why

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Select analysts on Dalal Street gave thumbs down to Titan Company despite it reported a consolidated profit of Rs 18 crore for the June quarter, helped by higher income. It had reported a net loss of Rs 297 crore in the corresponding period of the preceding fiscal. Total income during the quarter under review stood at Rs 3,519 crore. It was Rs 2,020 crore earlier, Titan said in a regulatory filing.

The scrip traded 1% down at Rs 1,781 at around 11.05 am (IST), while the benchmark BSE Sensex traded 54 points, or 0.10% down at 54,315.

The company said its higher revenue in the first quarter of the current fiscal was “primarily driven by the base effect of zero sales in April last year.”

Ace equity investor Rakesh Jhunjhunwala is one of the biggest shareholders in the company. He together with his wife Rekha Jhunjhunwala held 4.81% stake in the company as of June 30.

Experts view

Brokerage HDFC Securities retained ‘Sell’ call on HDFC Securities with a target price of Rs 1,500. “While Titan’s recovery execution (especially in jewellery) has been on point, a strong bounce-back in volumes is already baked in FY22/23, despite the impact of partial lockdowns (Q1) in Maharashtra and Delhi. Against this backdrop, the margin of safety seems non-existent at 62 times Jun-23 P/E. Hence, we maintain our Sell recommendation,” the brokerage said.

Goldman Sachs also maintained ‘Sell’ call on Titan with a price target of Rs 895, indicating a downside of 50% from the current market price. “Q1 revenue growth across segments were broadly in-line. However, EBITDA stood below estimates,” the overseas firm said.

Global brokerage firm CLSA also retained ‘Sell’ call on Titan with a price target of Rs 1,380. It said that the valuations have already priced in upside related to demand recovery and share gains.

On the other hand, brokerages including ICICI Securities and Motilal Oswal Financial Services are bullish on Titan with a target price of Rs 2,110 and Rs 2,065, respectively.