Titan Q4 preview: Brokerages expect double-digit growth in profit, revenue

Titan Company is expected to report double-digit growth across parameters in the quarter ending March 31. The Jewellery-to-watch maker will announce its quarterly results on May 8.

Its recent guidance for FY19 also indicated that trend. While the growth in jewellery business is likely to be in double-digits, an encouraging show from watches, eye wear and other segments was the key takeaway from the company's recent guidance.

For FY19, topline growth would be close to 22 percent year-on-year (YoY) as against a revenue uptick of 24.9 percent YoY in FY18, the company said last month.

According to brokerages, profit growth for the March quarter could be in the range of 19-37 percent and revenue may rise 15-23 percent backed by jewellery as well as watch & eyewear segments.

"We model (1) 24 percent YoY growth in jewellery segment revenues, (2) 17 percent YoY growth in the watches segment revenues driven by share gains and (3) 19 percent growth in eyewear," said Kotak which expects reported PAT growth of 64 percent and adjusted PAT growth of 37 percent on a revenue growth of 23 percent.

ICICI Securities, which expects 19 percent growth in profit and 17 percent in revenue, said despite a challenging scenario for jewellery players, Titan continues to gain market share.

Prabhudas Lilladher also said though industry consumption demand remained weak on increasing gold prices and financing issues, it expects good performance led by market share gain from unorganised players and traction form product activations.

"We expect Titan to continue the pace of its store openings."

At the operating level also, the performance is expected to be strong.

Kotak expects EBITDA margins to expand 200 bps YoY to 13.6 percent with strong margin improvement likely for watches and some increase in jewellery margins as well.

"We factor in EBITDA growth of 23.5 percent YoY for the quarter, with underlying margin expansion of 70bp YoY," Motilal Oswal said while Prabhudas Lilladher expects EBITDA growth of 20.5 percent YoY.

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Stay with largecaps in the short term: HDFC Securities

Nifty has been trading in the narrow range of 11,564-11,787 on closing basis for last one month. The Nifty has been taking support around 11,550 and the same should be kept as a stop loss in long positions.

Any close above 11800 would result in a breakout from the consolidation and in that case, we can expect Nifty to rally towards 12,000 and 12,430.

The Nifty has recently violated 20-day EMA support of 11,637. And, now a close below 11,550, which has been the lower level of the recent consolidation in Nifty, would be considered bearish trend reversal for the short-term.

Nifty is placed above medium to long-term moving averages of 20, 50, 100 and 200 days. The gap between 50-DMA and 200-DMA has been widening gradually, which indicates that bullish momentum is intact for medium to long term.

Oscillators are showing weakness in the trend but unless price support is broken, short term trend would be considered bullish in Nifty. To conclude, Nifty is holding positional up trend but fallen into the short term consolidation.

A close above 11,800 would result in a breakout and dive below 11,550 would result in a bearish trend reversal. The Midcap and Smallcap stocks are going weak and therefore it would be advisable to stick to the largecaps with strict stop losses, as far as short-term trading in concerned.

Here are three stocks that could give 7-11 percent return in the next month:

UltraTech Cement: Buy| LTP: Rs 4519| Target Rs 5,000| Stop loss: Rs 4,200| Return: 11 percent

Recently, the stock registered a new all-time high above Rs 4,600. It formed a bullish golden crossover on the charts that indicates a long-term trend reversal.

The stock has broken out from the long consolidation which was held on for the last nine quarters. The company has also posted nice quarterly results.

Considering the technical evidence discussed above, we recommend buying the stock at CMP and average it around Rs 4,400, for the target of Rs 5,000, and keep a stop loss at Rs 4,200 on a closing basis.

ITC: Buy| LTP: Rs 307| Target: Rs 330| Stop loss: Rs 295| Return: 7.5 percent

The stock witnessed a bullish golden crossover on the charts, where 50-DMA surpassed 200-DMA on the upside, indicating a long-term bullish trend reversal.

From the FMCG space, ITC looks the strongest stock for the short-term. The stock price has surpassed the crucial resistance level of Rs 300 after a long time.

Considering the technical evidence discussed above, we recommend buying the stock at CMP and average it at 300, for the target of Rs 330, and keep a closing stop loss at Rs 295.

ONGC: Buy| LTP: Rs 170| Target: Rs 185| Stop loss: Rs 160| Return: 9 percent

The stock price has broken out from the consolidation range of Rs 155-160. It has been sustaining above its 200-DMA. The short-term moving averages have been trading above long term moving averages.

Indicators and oscillators have been showing strength on the daily and weekly charts. Long term trend line breakout is seen on the weekly charts.

Considering the technical evidence discussed above, we recommend buying the stock between CMP and Rs 165 for the target of Rs 185 and keep a stop loss at Rs 160 on a closing basis.

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Titan hits record high taking market cap above Rs 1 lakh crore

Jewellery-to-watch maker Titan Company shares gained a percent to hit a record high of Rs 1,160 in the morning trade on April 25, taking its market capitalisation to Rs 1 lakh crore.

In last one year, the stock has rallied 25 percent on good earnings growth and management outlook.

It was quoting at Rs 1,158.30, up Rs 10.75, or 0.94 percent on the BSE, at 0921 hours IST.

Market capitalisation stood at Rs 1,02,832.27 crore.

Earlier this month, Titan had said it expects to achieve 20 percent revenue growth despite muted industry demand growth in FY19.

This is on the back of 1) 20 percent sales growth in jewellery business led by higher number of wedding, 35 stores additions in FY19, increased share of wedding jewellery and high-value diamond jewellery and gains from consumer shift from unorganised to organised sector 2) steady growth in watch division led by new launches and success of smartwatches and 3) benefits from backward integration in the eyewear business.

Jewellery division grew 22 percent in FY19 led by strong same store growth and market share gains despite slow growth in the industry while watches business increased around 16 percent in FY19 led by new product launches across brands and growth in the e-commerce channel.

Brokerages remained positive on the stock after strong guidance for financial year 2019-20.

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Source: Moneycontrol

Axis Bank to announce Q4 earnings today; here's what brokerages are expecting

Axis Bank, country's third largest private sector lender, is likely to register healthy growth across parameters in March quarter driven by lower credit cost and lower slippages. The bank will declare its results on April 25.

"Lower credit cost and lowering slippages should drive earnings. NII growth to also accelerate on back of rise in MCLR and changing loan mix," Prabhudas Lilladher said.

Profit for the quarter ended March 2019 is expected to be in the range of Rs 1,500-2,300 crore against loss of Rs 2,188.7 crore in same period last year.

"Strong margins and stabilisation in the credit cost on account of lower slippages will drive the earnings with PAT growth of 40 percent QoQ at Rs 2,358 crore. Management targets to achieve 18 percent return on equity over the medium term," Narnolia said.

Motilal Oswal expects profit at Rs 1,518.5 crore for fourth quarter, thus resulting in total PAT of Rs 4,690 crore for FY19.

Net interest income, the difference between interest earned and interest expended, is seen growing at least 20 percent on healthy loan (credit) growth, with net interest margin at around 3.5 percent.

"Axis Bank in a bid to achieve its long-term target is poised to show incremental progress on operational matrix with improvement in credit growth as well as NII growth. Credit growth is expected at 17.2 percent YoY led by traction in retail as well as corporate portfolio," said ICICI Securities which expects NII growth of 19.6 percent YoY.

"Loan growth will be better than industry average given the continued momentum in retail growth and opportunistic pick up in corporate," said Edelweiss which expects NII growth at 27 percent YoY.

Pre-provision operating profit is expected to be strong with Reliance Securities, Antique Stock Broking, Edelweiss, Narnolia and Kotak seeing the growth in the range of 30-52 percent YoY.

Asset quality is expected to see further improvement in March quarter with lower slippages than the third quarter.

"Asset quality is expected to improve with the moderation in slippages ratio at 0.53 percent in Q4FY19. With high provision coverage ratio of 75 percent, credit cost is likely to be lower in Q4FY19," Narnolia said, adding gross non-performing assets may be around 5.2 percent in Q4 against 5.8 percent in Q3.

According ICICI Securities, credit cost may remain lower at 52 bps on the back of moderation in slippages.

"We expect slippages of Rs 2,400 crore (2 percent of loans) mostly from 'below investment grade book'. We expect more traction on recovery from write-off pool. No major concerns on asset quality," Kotak said.

Key issues to watch out for

- quantum of corporate slippages from BB and below list and any revision in the size of the stressed assets;

- outlook on the power assets,

- bank's strategy on retail, unsecured and business banking loans

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Source: Moneycontrol

FII pulse: Investors raise stake in 187 companies in Q4, book profits in over 200

Foreign institutional investors, who poured in more than Rs 40,000 crore in Indian markets in the March quarter, raised stake in 187 companies on a sequential basis.

On the other hand, they booked profits or reduced stake in over 200 companies, data from AceEquity showed.

According to shareholding data declared by companies as of April 12, the stocks where foreign investors (FIIs) raised stake in the fourth quarter include Axis Bank, UPL, PNB, Bajaj FinServ, Wipro, Bajaj Finance, ACC, Bharti Airtel, SBI, Aurobindo Pharma, HDFC and DLF.

Thanks to the foreign money flowing in, benchmark indices gained momentum after January and strong buying was seen in sectors like banks, financial services, autos, oil & gas and pharma.

Most stocks in which foreign investors have raised stake are high beta names but there are stocks which are showing signs of growth and investors should take note of that because there's more to this than meets the eye, suggest experts.

“Most stocks that we have seen are yes into a high beta category but we also see some value in these companies. Stocks like Axis Bank, with improved asset quality, Higher NII which was up 18% QoQ, higher profit and drop in gross NPA is a stock that should be part of one's portfolio when the market is in an established uptrend. NCC, on the other hand, offers immense growth opportunity,” Mustafa Nadeem, CEO, Epic Research told Moneycontrol.

“Investors attribute high beta as a riskier asset bet but many high beta stocks are actually wealth creator,” he said.

After subdued January, FII flows picked up in February and March.

Foreign investors were net buyers of Indian assets in the March quarter, but they reduced stake in as many as 206 companies, as per shareholding data collated on April 12.

Companies in which foreign investors reduced their stake include Bajaj Holdings, NTPC, Union Bank of India, ITC, NMDC, IDBI Bank, Hindustan Unilever, Hindustan Zinc, UltraTech Cement, Cadila Healthcare, and JSW Steel.

Most analysts see this as routine profit taking from foreign investors whenever there is a change in trend or cyclicality of the market.

Sector rotation is normal and is done to change or rebalance the portfolio, suggest experts. They exit stocks which may have performed well in the past or previous rally but may not necessarily lead or perform again.

“Many of these stocks had an excellent run in last 4 years and are now trading at expensive valuations so we believe this is just a routine profit taking. We would advice buying these stocks once they are available at attractive valuations,” Atish Matlawala, Sr Analyst, SSJ Finance & Securities told Moneycontrol.

“Investors may get a bit cautious as many would like to stick to stocks where there is money flow or smart money,” he said.

Talking about ITC, Nadeem said it is well covered in many funds but it is usually a dividend factor and not in terms of price change.

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Source: Moneycontrol

Asian shares edge up to nine-month high, European, Japan PMIs awaited

Asian shares were subdued on Thursday after a negative performance on Wall Street, with caution ahead of business surveys in Europe and Japan, and the Good Friday and Easter holidays keeping investors on the sidelines.

MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.08 percent, trading just below its highest since late July 2018 brushed on Wednesday.

Australian shares advanced a quarter of a percent while Japan's Nikkei was a shade lower.

"We're in this kind of hiatus in the global economy," said Chris Weston, head of research at foreign exchange brokerage Pepperstone in Melbourne.

"People are starting to believe that we're going to see better times in the second quarter and probably into the third quarter as well, and that perhaps the first quarter has been that trough."

Wall Street shares ended in the red on Wednesday, with the S&P 500 falling 0.2 percent as a drop in healthcare equities outweighed upbeat economic data from the United States and China.

The US trade deficit fell to an eight-month low in February as imports from China plunged, data on Wednesday showed.

Separate figures from China earlier in the day showed the world's second-largest economy grew at a steady 6.4 percent pace in the first quarter, defying forecasts for a slowdown. Attention is now turning to how much more stimulus Beijing will apply without triggering more financial risks.

Investors' immediate focus turned to the release of Purchasing Managers Indexes (PMIs) for the manufacturing and service sectors in Europe later on Thursday to provide more clues on the strength of the euro zone economy.

"It's going to be interesting to see if we see some stabilization there in line with what we've been seeing in the stabilization in the Chinese data flow," said Pepperstone's Weston.

A flash manufacturing reading will also be released for Japan.

YEN NEAR 2019 LOW

Market participants are also eyeing signs of progress in U.S.-China trade negotiations.

Washington and Beijing set a tentative timeline for a fresh round of face-to-face meetings ahead of a possible signing ceremony in late May or early June, according to a Wall Street Journal report.

Attorney General William Barr is set to hold a news conference at 1330 GMT to discuss the release of Special Counsel Robert Mueller's report on Russian interference in the 2016 U.S. presidential race.

"The lack of love for the yen, I suppose, is just telling us that people aren't seeing this as a general risk event," said Pepperstone's Weston.

"It's probably worth keeping a beady eye in case something really does come out that shocks market into life."

In the currency market, the safe-haven yen was slightly up at 112.00 yen per dollar, sitting just above a near four-month low of 112.17 brushed overnight.

The euro ticked up to $1.1297, while the Australian dollar was 0.1 percent lower at $0.7173 ahead of job data (0130 GMT).

The dollar index held steady at 97.019 after ending the previous session basically unchanged.

In commodity markets, oil prices were slightly lower as U.S. government data overnight showed inventories drew down less than an industry report had suggested on Tuesday.

US crude was last down 8 cents at $63.68 a barrel, while global benchmark Brent crude futures dipped 7 cents to $71.55.

Spot gold held steady at $1,274.60 per ounce, hovering near its lowest for the year.

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Source: Moneycontrol

Infosys hit by slew of downgrades post Q4 results; should you buy, sell or hold?

Infosys, which reported a 10.51 percent year-on-year (YoY) rise in consolidated profit at Rs 4,078 crore for March quarter beating analyst expectations, was hit by a slew of downgrades post-March quarter results.

The Bengaluru-based technology major reported 2.4 percent QoQ growth in revenue but margin at 21.4 percent was below expectations of 22.2 percent.

Also, the IT major lowered its revenue guidance to 7.5-9.5 percent in constant currency terms. The company had set the revenue guidance at 8.5-9 percent in FY19 as opposed to 6-8 percent in FY18.

Reacting to the results, Morgan Stanley, CLSA and Credit Suisse downgraded the stock and slashed its 12-month target price to Rs 650 which roughly translates into a downside of about 13 percent from Friday’s closing price of Rs 743.

Here’s what global brokerage firms recommended for Infosys post Q4 results:

Morgan Stanley: Equal-Weight| Target cut to Rs 700 from Rs 775

Morgan Stanley downgraded Infosys to Equal-Weight from Overweight earlier post March quarter results and also slashed its 12-month target price to Rs 700 from Rs 775 earlier.

Infosys reported a soft Q4 relative to our expectations. The P/E discount to TCS has narrowed but could reverse now, said the note. It also slashed EPS estimates by 2.5/3.9 percent for FY20/21.

EBIT margin of 21.4 percent in Q4 led to a downward revision in margin guidance. Morgan Stanley is of the view that weak margin in Q4 was largely due to low utilisation rates.

Credit Suisse: Underperform| Target cut to Rs 650 from Rs 770 earlier

Credit Suisse downgraded Infosys to Underperform from Neutral earlier post March quarter results and slashed its 12-month target price to Rs 650 from Rs 770 earlier.

It slashed valuation multiple from 18x to 16x on margin disappointment. Growth is picking up for Infosys, but likely to fall short of heightened expectations, said the note.

Another leg down on margin, and there is no comfort on what the floor could be. Arbitrage trade vs TCS could reverse. Credit Suisse slashed FY20/FY21 estimates by 5/6 percent.

Nomura: Reduce; Target: Rs 680

Nomura downgraded Infosys to Reduce post March quarter results with a target price of Rs 680. The downgrade was on the back of weaker growth outlook and likely slower EPS CAGR underpin cautious stance.

The global investment bank slashed FY20-21 EBIT margin by 30-90 bps, leading to 1-4 percent lower EPS estimates. The pending open-market buyback could provide some support.

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Source: Moneycontrol

Rail Vikas Nigam debuts flat at Rs 19 on NSE, BSE

Rail Vikas Nigam shares have seen a flat opening on April 11, the first day of trade on exchanges.

The stock listed at Rs 19, the upper end of the price band, but immediately drifted marginally lower at Rs 18.80 on the BSE as well as National Stock Exchange, down 1.05 percent from issue price at 10:01 hours IST.

The 25.34 crore-share initial public offering of Rail Vikas Nigam, which opened for subscription during March 29 and April 3, was subscribed 1.83 times.

The wholly-owned government company, a Miniratna central public sector enterprise, incorporated by the Ministry of Railways, launched its IPO at a price band of Rs 17-19 per share.

The company raised about Rs 480 crore by selling 12.12 percent stake.

This is the first Central Public Sector Enterprise (CPSE) disinvestment in the current fiscal, which started on April 1.

In April 2017, the Cabinet Committee on Economic Affairs had approved the listing of five railway companies -- IRCON international, Rail Vikas Nigam, Indian Railway Finance Corp Ltd, RITES Ltd and Indian Railway Catering and Tourism Corp. Out of these five, IRCON international and RITES was listed in 2018-19.

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Source: Moneycontrol

Nelco gains 2% after selling stake in Nelito Systems for Rs 6.77 crore

Shares of Nelco Ltd gained almost 2 percent intraday on March 28 after the satellite communication company sold its entire investment in Nelito Systems at a consideration of Rs 6.77 crore to Japan-based IT company DTS Corporation.

The company in its BSE release said that the Board of Directors granted approval for the sale of 2,53,665 equity shares of Nelito Systems, representing 12.3 percent stake, to DTS Corporation for Rs 6.77 crore.

The share touched its 52-week high of Rs 372.05 and 52-week low of Rs 154 on 14 August 2018 and 28 March 2018, respectively.

At 0956 hours, Nelco Ltd was quoting Rs 285, up 1.91 percent on the BSE.

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Source: Moneycontrol

HCL Tech rallies 3% as BofAML upgrades stock, expects 20% upside

HCL Technologies rallied about 3 percent on Thursday morning and was also the top Sensex gainer after global investment firm BofAML upgraded the stock.

BofAML revised its rating on the stock to 'buy' from 'neutral' and hiked its target price from Rs 1,060 to Rs 1,250 which translates into an upside of nearly 20 percent from current levels.

The stock has been on investors’ radar - it has rallied by about 9 percent so far in 2019 and a little over 10 percent in the last three months.

The global investment bank expects the organic revenue growth rate to improve in 2019-20. The stock is poised to gain from the large deal intake and lower portfolio drag.

The global investment bank sees stable margin on accretion from software products in the next financial year. The 2019-20 revenue guidance implies an uptick in organic growth rate.

In the December quarter results, HCL Tech has maintained its full-year constant currency revenue growth guidance at 9.5-11.5 percent and EBIT margin expansion forecast at 19.5-20.5 percent.

The country's fourth largest IT company reported 2.8 percent sequential growth in December quarter net profit to Rs 2,611 crore, beating analysts' estimates.

Revenue in rupee terms increased 5.6 percent quarter-on-quarter to Rs 15,699 crore in the quarter ended December 2018, the company said.

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Source: Moneycontrol

Yes Bank gains 4% as Deutsche Bank raises price target

Yes Bank shares rallied nearly 4 percent in the morning trade on March 14 after global investment firm Deutsche Bank revised its price target for the stock upwards to Rs 300 from Rs 280 earlier.

The stock was quoting at Rs 252.90, up Rs 8.55, or 3.50 percent on the BSE, at 0942 hours IST.

While maintaining buy call on the stock, the brokerage said the tough phase for the bank is behind and it is moving towards stability.

According to the research house, earnings are likely to be softer, but the quality is set to improve going ahead.

"We expect corporate loan growth to slow down to 12-15 percent, but retail/SME Loan should grow at 40-50 percent. We expect overall loan book growth at 16-18 percent over FY20-21," Deutsche said, adding net interest margin of the bank should hold up well, though fees income may slow down.

Last month, global rating agency Moody's had changed its outlook on the company to stable from negative.

Initially this month, another global brokerage house CIMB had upgraded Yes Bank to add and also raised price target to Rs 300 (from Rs 230 earlier) as concerns abated on asset quality and the top management of the bank.

The global research house had said the nil divergence report of RBI and appointment of MD & CEO Ravneet Gill would result in a re-rating of the stock as valuations remain attractive at 1.5x FY20F P/BV.

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Source: Moneycontrol

Tata Motors stock crash: Over 200 mutual fund schemes own equity worth Rs 4,000 cr

Shares of Tata Motors, which underperformed benchmark indices in 2018, witnessed a fresh round of selling recently after December quarter results. It led to an erosion of more than Rs 8,600 crore in terms of market capitalisation.

Tata Motors hit a 10-year low in intraday trade a day after it reported a net loss of Rs 26,961 crore for the quarter ended December 2018 impacted by an exceptional item of asset impairment of Rs 27,838 crore.

Over 200 mutual fund schemes are invested in Tata Motors, which is part of Nifty and Sensex. Any drastic slide in market price could also impact those which have considerable exposure in the automaker.

Out of 200 schemes, 16 have exposure of more than 2 percent including Reliance Capital Builder, Reliance Vision, Reliance Tax Saver, UTI Focused Equity, Kotak India Growth Fund and ICICI Prudential Bharat Consumption, Morningstar India data showed.

In terms of value, more than Rs 4,000 crore of mutual fund money is riding on Tata Motors, and approximately Rs 1,700 crore in Tata Motors DVR, data showed.

We have collated a list of 15 MFs from data provided by Morningstar India that have exposure of more than 2 percent of their AUM in Tata Motors:

According to Reuters, analysts giving buy rating to Tata Motors have reduced from 16 to 11 in the last three months. The consensus has now shifted towards holding the stock.

Some brokerage firms such as Axis Capital and Motilal Oswal downgraded Tata Motors stock post the December quarter numbers that were impacted by an exceptional item of asset impairment.

Most brokerage firms reduced their earnings per share (EPS) estimate for Tata Motors and reduced their target price on the stock. CLSA retained sell rating on Tata Motors and has a target price of Rs 150.

JLR reported a loss for the third straight quarter as net sales declined 1 percent YoY to 6.2 billion pounds, as volumes fell 11 percent YoY. EBITDA margin shrank 180 bps to 7.3 percent impacted by one-off cost on account of de-stocking and warranty cost.

JLR margins declined QoQ despite higher volume. The big asset impairment dragged Tata into a consolidated loss. The demand outlook has worsened in recent quarters in China and India.

CLSA slashed its FY19-21 EPS estimate for Tata Motors by 2-66 percent. The stock will remain weak given insufficient near-term product triggers, said the research firm.

The weak sales in China and de-stocking have impacted JLR numbers. The December quarter loss stood at 3,129 million pounds. JLR’s EBITDA margin stood at 7.8 percent which was 200 bps below estimate.

The finance cost for the Indian automaker increased by Rs 321 crore to Rs 1,568 crore during Q3FY19 versus the same quarter last year.

It is tough to bottom fish in the company while P&L (profit & loss) seems to be near trough.

Axis Capital downgraded Tata Motors to 'hold' after December quarter earnings and reduced its target price to Rs 187 from Rs 217 earlier.

Motilal Oswal downgraded Tata Motors to 'Neutral' after December quarter results with a target price of Rs 166. The brokerage firm also slashed its FY20/21 consolidated EPS estimate by 21percent/13 percent.

Deutsche Bank maintained its 'hold' rating on Tata Motors after December quarter results and reduced its target price to Rs 175 from Rs 195 earlier.

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Source: Moneycontrol

Bank of Baroda raises lending rates by up to 0.2%

Ahead of the monetary policy review, state-owned Bank of Baroda (BoB) Tuesday increased its lending rates by up to 0.2 per cent, a move that will make home, auto and other loans expensive.

The bank has revised the marginal cost of funds-based lending rate (MCLR) with effect from Thursday, BoB said in a statement.

The MCLR for a three-month tenor increased to 8.50 per cent from the existing 8.30 per cent and for six-month maturity, it will go up to 8.70 per cent from the current 8.50 per cent.

Interest rate on one-year tenure will go up by 0.1 per cent to 8.75 per cent.

Most of the retail loans are benchmarked against one-year MCLR.

The RBI is schedule to unveil its sixth bi-monthly monetary policy on Thursday.

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Source: Moneycontrol

Titan stock jumps 5% as brokerages hike target price on strong Q3 earnings

Titan Company shares gained 5 percent to hit a 52-week high of Rs 1,044.30 on Monday morning as brokerage houses raised price target on the stock after the company reported strong earnings for December quarter.

The stock was quoting at Rs 1,031.90, up Rs 40.60 or 4.10 percent, amid high volumes on the BSE at 10:12 hours IST.

Global brokerage house Credit Suisse upgraded rating on the watches-to-jewellery maker to outperform from neutral and raised price target to Rs 1,175 from Rs 935 apiece after increase in its earnings estimates by 3-10 percent.

Higher gold prices have been aiding an already strong growth trajectory, said the research house which sees tailwinds from a strong wedding season.

CLSA also retained its outperform call on the stock and raised price target to Rs 1,100 from Rs 1,035 after revising EPS estimates by 2-6 percent as strong Q3 results drove earnings upgrade.

Exceptional performance in jewellery business was highlight of Q3 earnings and watches business faced margin headwinds on phasing out issue in A&P spends, the brokerage house said, adding the management is hopeful of a pick-up in jewellery sales in March.

Titan reported a healthy 43.5 percent on-year growth in third quarter consolidated profit to Rs 413.2 crore driven by revenue growth and strong jewellery business during festive season.

Revenue from operations during the quarter grew 34.6 percent year-on-year to Rs 5,871.5 crore with jewellery business growing 37 percent YoY.

The topline growth was driven by these new introductions, some successful activations as well as measured network expansion, the company said.

The income from watches increased 18.8 percent to Rs 641 crore and the eyewear business too grew a healthy 39.7 percent in Q3 to Rs 129 crore.

At operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) grew 31.4 percent YoY to Rs 584.2 crore in Q3, but margin contracted to 10.3 percent against 10.5 percent YoY.

Adjusted EBITDA stood at Rs 654 crore for the quarter. During the quarter, there was an additional provision of Rs 70 crore made for investments as part of treasury operations in inter corporate deposits in the IL&FS group.

Jefferies has maintained its hold rating on Titan but raised target price to Rs 1,100 from Rs 920 after increase in earnings estimates by 6 percent for FY19-21.

"The company continued to execute strongly & gaining share in jewellery business. 48x FY20e PE fairly captured superior execution & strong brand franchise," the brokerage said.

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Source: Moneycontrol