The Indian stock market is currently experiencing a significant downturn, with billions in losses being reported. Experts are labeling this situation as one of the most severe corrections in decades, prompting widespread panic among investors. Even once-popular stocks are facing substantial declines, leaving many feeling anxious about their investments.

Despite this turmoil, a select group of investors remains unfazed. These individuals, often referred to as the ‘Warren Buffetts of India,’ take a different approach to market fluctuations. Among them is Rekha Jhunjhunwala, a prominent figure in Indian investing and the widow of the late Rakesh Jhunjhunwala, a celebrated investor in his own right.

Titan Company Ltd: A Deep Dive

One of the stocks that the Jhunjhunwalas have held onto for years is Titan Company Ltd. This iconic brand, known for its watches, jewelry, and eyewear, has been a staple in the Indian market since its inception in 1984, founded as a collaboration between the TATA Group and the Tamil Nadu Industrial Development Corporation (TIDCO).

• Market Capitalization: Currently stands at approximately ₹2,68,384 crore.
• Brands Under Titan: Includes Tanishq, Fastrack, Titan Eye+, and Sonata, among others.

In its latest presentation from February 2025, Titan reported crossing the ₹50,000 crore mark in Gross Uniform Cost Price (GUCP) for 2024, showcasing impressive growth and demand. The company also celebrated the opening of its 3,000th exclusive brand outlet, further cementing its market presence.

A Legacy of Investment

Rakesh Jhunjhunwala began investing in Titan in 2002-2003, when shares were priced at a mere ₹4 (adjusted). The Jhunjhunwala family’s commitment to Titan has remained strong, with Rekha Jhunjhunwala currently holding a 1.07% stake as of December 2024. Despite fluctuations over the years, their steady investment reflects a profound belief in the company’s potential.

As of March 10, 2025, Titan’s share price was recorded at ₹3,027, just above its 52-week low of ₹3,017. In the last decade, the stock has seen an all-time high of ₹3,887.

Financial Performance and Growth Metrics

Titan is known for its efficient capital management. The company boasts a Return on Capital Employed (ROCE) of about 23%, with a 10-year average ROCE of 25%. This means that for every ₹100 invested, Titan generates a profit of roughly ₹25.

• Dividend Payout: Titan maintains a healthy dividend payout ratio of 28%.
• Sales Growth: From ₹19,779 crore in FY19, sales surged to ₹51,084 crore in FY24, marking a 21% compounded growth.

For the first three quarters of FY25, Titan has already achieved sales exceeding ₹45,000 crore. The company’s net profit also reflects strong growth, increasing from ₹1,389 crore to ₹3,496 crore over the past five years.

Future Outlook and Challenges

Titan’s EBITDA has similarly grown from ₹1,994 crore in FY19 to ₹5,292 crore in FY24, reflecting a 22% compounded growth. However, the company faced a dip in profits during the quarters ending March, June, and September of 2024, before rebounding with a 48% increase in December. Managing Director C.K. Venkataraman attributed this fluctuation to custom duty-related losses.

Currently, the stock trades at a PE ratio of 83x, significantly higher than the industry median of 34x. Investors are evidently willing to pay a premium for Titan shares, which trade at nearly 28 times their book value of ₹110.

Strategic Plans for Expansion

Titan is eyeing an ambitious target of US$500 million in UCP value by FY 2026-27, as highlighted by the company’s management. CFO Ashok Sonthalia emphasized plans to enhance operational efficiency, invest in technology, and tap into underserved markets to improve customer experiences.

Additionally, Life Insurance Corporation of India holds a 2.17% stake in Titan, indicating broader institutional confidence in the company.

Conclusion: A Company to Watch

Titan’s robust financial metrics, along with a high ROCE and consistent dividend payouts, underscore why the Jhunjhunwalas and other investors maintain their interest in the brand. However, it’s important to note that approximately 80% of Titan’s revenue is generated through its premium jewelry line, Tanishq. The growing popularity of lab-grown diamonds, which are significantly cheaper than mined alternatives, poses a potential challenge for the company.

As the market evolves, Titan has historically demonstrated resilience, suggesting that it deserves a spot on your investment watchlist. If you haven’t explored this stock yet, now might be the time to consider its potential for future growth.

Disclaimer

The information contained in this article is intended for educational purposes only and should not be construed as financial advice. Investors are encouraged to conduct their own research and consult with financial advisors before making investment decisions.