In the wake of Titan's robust Q2 earnings for the September quarter, CLSA has upgraded its rating for the Tata Group's company from 'outperform' to 'buy'. The brokerage firm also raised the share price target to ₹3,948, following a 9.7% YoY increase in net profit and a 33.6% YoY surge in operational revenue.
Titan, a subsidiary of the Tata Group, reported a net profit of ₹940 crore, marking a 9.7% YoY increase. Operational revenue saw an even more significant jump, with a 33.6% YoY surge to ₹11,660 crore (INR100 crore = approx. USD12 million). These strong results led to CLSA's rating upgrade and the raising of the share price target.
Despite these encouraging financial outcomes, Titan's shares experienced a flat trading day on BSE on October 6, closing at ₹3,274.80 after opening at ₹3,338.00. This was marginally higher than the closing price prior to the Q2 results announcement, which was ₹3,272.55.
The new rating and price target reflect CLSA's confidence in Titan following its strong second-quarter performance. However, it remains to be seen how this will impact Titan's share price in the coming weeks and months.
InvestingPro Insights
In light of the recent developments, InvestingPro provides some valuable insights. The data indicates that Titan has a market capitalization of $588.99 million and a P/E ratio of 5.06, which is relatively low, suggesting that the company's shares could be undervalued. The P/E ratio for the last twelve months as of Q2 2024 is even lower at 4.7. Furthermore, the company's revenue growth for the same period stands at an impressive 28.39%.
InvestingPro Tips highlight that Titan yields a high return on invested capital and has consistently increasing earnings per share. This aligns with the company's recent Q2 results, which saw a 9.7% YoY increase in net profit. Furthermore, Titan operates with a high return on assets, indicating efficient management of its resources.
For those seeking more detailed insights, InvestingPro offers an additional 18 tips related to Titan's performance and valuation. These tips could be instrumental in making informed investment decisions.
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