Titan up 9% on CLSA upgrade, Q3 nos good despite demonetisation

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Shares of  Titan Company
gained 9.5 percent intraday Wednesday on the back of healthy growth in third quarter despite demonetisation.

The watch and jewellery maker said profit in October-December quarter grew by 13 percent to Rs 255.7 crore compared with Rs 226.2 crore in year-ago quarter, driven by topline as well as operational performance.

Revenue increased 14.4 percent year-on-year to Rs 3,926 crore in the quarter ended December 2016, aided by jewellery as well as watch businesses.
CLSA has upgraded the stock to buy from underperform and also increased target price to Rs 500 from Rs 372 after raising EPS forecasts by 9-24 percent.

Results displayed that concerns post demonetisation were unfounded, the brokerage house says.

Operating profit jumped 20.9 percent to Rs 373.5 crore and margin expanded by 51 basis points to 9.51 percent compared with same quarter last fiscal.

Titan’s jewellery business registered a growth of 15.4 percent at Rs 3,255 crore, with EBIT (earnings before interest and tax) rising 15.2 percent while watch division showed a growth of 5.1 percent at Rs 508.3 crore, with EBIT up 63.3 percent.

At 10:02 hrs Titan Company was quoting at Rs 426.50, up Rs 33.10, or 8.41 percent on the BSE.