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TITAN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.3
| Stock Code | TITAN | Market Cap | 3,53,805 Cr. | Current Price | 3,985 ₹ | High / Low | 4,312 ₹ |
| Stock P/E | 90.8 | Book Value | 201 ₹ | Dividend Yield | 0.28 % | ROCE | 17.2 % |
| ROE | 21.3 % | Face Value | 1.00 ₹ | DMA 50 | 3,977 ₹ | DMA 200 | 3,706 ₹ |
| Chg in FII Hold | -0.56 % | Chg in DII Hold | 0.84 % | PAT Qtr | 1,006 Cr. | PAT Prev Qtr | 1,030 Cr. |
| RSI | 43.8 | MACD | -6.12 | Volume | 11,64,604 | Avg Vol 1Wk | 12,80,825 |
| Low price | 2,925 ₹ | High price | 4,312 ₹ | PEG Ratio | 6.25 | Debt to equity | 1.39 |
| 52w Index | 76.4 % | Qtr Profit Var | 42.7 % | EPS | 43.9 ₹ | Industry PE | 24.3 |
📊 Core Financials
- Revenue Growth: Stable, though quarterly PAT declined slightly from 1,030 Cr. to 1,006 Cr.
- Profit Margins: EPS at 43.9 ₹ reflects strong profitability supported by premium product positioning.
- Debt Ratios: Debt-to-equity at 1.39, relatively high compared to peers, increasing financial risk.
- Cash Flows: Positive, backed by consistent earnings and strong consumer demand.
- Return Metrics: ROCE at 17.2% and ROE at 21.3% highlight efficient capital utilization.
💹 Valuation Indicators
- P/E Ratio: 90.8, far above industry average (24.3), indicating extreme premium valuation.
- P/B Ratio: ~19.8 (Current Price / Book Value), very expensive relative to book value.
- PEG Ratio: 6.25, suggests valuation is stretched compared to growth prospects.
- Intrinsic Value: Current price (3,985 ₹) trades near DMA 50 (3,977 ₹) and above DMA 200 (3,706 ₹), reflecting strong investor confidence despite overvaluation.
🏢 Business Model & Competitive Advantage
- TITAN operates in jewelry, watches, and eyewear, with strong brand equity and wide retail presence.
- Competitive advantage lies in brand trust, premium positioning, and diversified product portfolio.
- High debt and stretched valuation remain concerns despite strong fundamentals.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive only near 3,600–3,700 ₹, closer to DMA 200, given premium valuation risks.
- Long-Term Holding: Suitable for investors seeking exposure to consumer discretionary growth. Strong fundamentals support holding, but valuation premium limits upside.
Positive
- Strong ROE (21.3%) and ROCE (17.2%) highlight efficient capital use.
- EPS of 43.9 ₹ reflects solid earnings power.
- DII holdings increased (+0.84%), showing domestic institutional confidence.
Limitation
- Extremely high P/E ratio (90.8) compared to industry average.
- High debt-to-equity ratio (1.39) increases financial risk.
- Dividend yield at 0.28% offers negligible shareholder return.
Company Negative News
- Quarterly PAT declined slightly from 1,030 Cr. to 1,006 Cr.
- FII holdings decreased (-0.56%), showing reduced foreign investor confidence.
Company Positive News
- Strong 52-week performance (76.4%) reflects investor optimism.
- Stock trading near DMA 50 and above DMA 200, showing technical strength.
Industry
- Industry P/E at 24.3, much lower than TITAN’s valuation, suggesting sector trades at more reasonable multiples.
- Consumer discretionary sector benefits from rising incomes and premiumization trends.
Conclusion
- TITAN is fundamentally strong with brand equity, profitability, and efficient capital use.
- Valuation is extremely stretched compared to industry, limiting near-term upside.
- Best suited for long-term investors seeking brand-driven growth, with entry near 3,600–3,700 ₹ offering better value.
I can also prepare a peer valuation HTML table comparing Titan with other consumer discretionary players like Kalyan Jewellers and PC Jeweller to highlight relative strengths and risks. Would you like me to add that?