Titan gets CCI nod for additional 27.18% stake purchase in CaratLane

Titan Company's shares reached a fresh all-time high on Wednesday, marking the sixth consecutive session of gains. The stock gained nearly 1%, reaching ₹3,425.00 on the BSE. This surge was fueled by the recent approval from the Competition Commission of India for Titan to acquire an additional stake in its subsidiary, CaratLane.

On November 21, Titan share price climbed over 1% and crossed its market capitalization beyond ₹3 lakh crore for the first time. Over the past three months, Titan shares have gained over 11%, showing an impressive year-to-date increase of more than 31%.

Titan Boosts Stake in CaratLane

The board of directors at Titan Company, a prominent player in the Tata Group, had greenlit the acquisition of the entire 27.18% stake held by the founder of CaratLane Trading Pvt Ltd and his family. This move elevated Titan's shareholding in CaratLane to 98.28%, up from the initial 62% stake acquired in 2016. The acquisition, valued at ₹4,621 crore, underlines Titan's commitment to expanding its presence in the jewelry sector.

CaratLane, established by Mithun Sacheti and his family, has played a pioneering role in revolutionizing India's conventional jewelry shopping by embracing a more digital-friendly approach. Titan's acquisition of CaratLane represents a strategic move aimed at leveraging the rising digital trend and the increasing preference of consumers for online shopping. This acquisition highlights Titan's dedication to broadening its digital presence, affirming the company's belief in the expansive growth possibilities within India's e-commerce landscape.

Financial Highlights

In the second quarter of FY24, Titan Company reported a net profit of ₹940 crore, marking a growth of 9.7% compared to the same quarter in the previous fiscal year from ₹857 crore. Standalone revenue from operations during Q2FY24 surged by 33.6%, reaching ₹11,660 crore from ₹8,730 crore, YoY. Showcasing the company's strong financial performance.

Segment-wise Growth

In the jewelry segment, Titan recorded a total income of ₹8,575 crore, reflecting a substantial 19% YoY increase. The EBIT for Q2FY24 reached ₹1,206 crore, with an EBIT margin of 14.1%, driven by a stronger presence in the studded jewelry portfolio.

Titan's Watches & Wearables segment recorded a historic achievement, crossing ₹1,000+ crore in quarterly revenues for the first time in its journey. With a total income of ₹1,092 crore during the quarter, this segment recorded a 32% YoY growth.

Stock Performance

As of 11:42 am, Titan shares were trading 0.95% higher at ₹3,426.30 on the BSE, commanding a market capitalization of more than ₹3.03 lakh crore. This bullish trend reflects the confidence of investors in Titan's strategic moves and robust financial performance.

In the last month alone, Titan's share price has jumped by 6.43%, showing a steady upward trend. Looking back over six months, the stock has soared by an impressive 26%, and over a year, investors have enjoyed close to a 32% return. But the real highlight is Titan's remarkable performance over the last five years, delivering a whopping 270% return. Clearly, it has been a winner for long-term investors.

From a technical viewpoint, Titan is currently on an uptrend, trading around ₹3425. A recent breakout at ₹3350, just two days ago, signals that the upward momentum is still strong. However, the Relative Strength Index (RSI) on the daily chart is at 70, indicating that the stock is in overbought territory.