Jhunjhunwala’s Titan stock bet now worth Rs 16,300 cr! Worth a look? CLSA shares view

With Titan Company Ltd crossing Rs 3,00,000 crore in market value, the value of Titan shares that the Jhunjhunwala family owned in the Tata group firm has topped Rs 16,000 crore mark. Rekha Rakesh Jhunjhunwala, the wife of late seasoned investor Rakesh Jhunjhunwala, owned 4,76,95,970 shares, or 5.37 per cent stake, in Tata Company as on September 30. This stake, at Wednesday's intraday levels, was worth Rs 16,323 crore. This is against Jhunjhunwala's total portfolio value of Rs 37,016 crore, as per data publicly available with Trendlyne.

On Wednesday, Titan Company shares were trading 0.81 per cent higher at Rs 3,421.80. This is after the jewellery maker said it would acquire the entire 91,90,327 equity shares held by the Founder of CaratLane Trading Private Limited and his family members, representing 27.18 per cent of the total paid-up equity share capital of CaratLane on a fully diluted basis.

CLSA said Titan’s earnings per share may grow 24 per cent annually over FY23-26 and 21 per cent over FY23-33, driven by geographical expansion, new formats and luxury growth. CLSA said its estimates are 16 per cent-28 per cent above consensus for FY25-26.

"At 43 times FY26, Titan trades at a 10 per cent premium to our consumer coverage, however, we believe Titan can grow significantly faster over FY23-26CL and beyond as it makes further inroads into the rapidly growing luxury market as well as that for Indian jewellery overseas. Its core domestic business also has a long runway for growth and several of its new categories, which means investors should pay growth multiples for several more years," CLSA said.

Titan’s management has guided for jewellery revenue to rise 2.5 times in five years, from FY22, implying a 20 per cent annual growth and FY27 consolidated jewellery sales of Rs 61,200 crore.

"We forecast FY27 consolidated jewellery revenue of Rs865bn, 41 per cent higher than company guidance. We would note that six quarters in, Titan is currently 46 per cent higher than the sales implied by its 20 per cent CAGR, however, this has been aided by a sharp increase in gold prices of 17 per cent. The jewellery business has seen a sharp acceleration in new store additions, across formats over the past four quarters, which we believe will be a bedrock for growth," it said.

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