Brokerage firm Morgan Stanley on Friday upgraded its stance on two key consumer stocks—Titan and Jubilant FoodWorks—despite a sluggish overall consumer market. The brokerage cited resilient business models and strong strategic positioning as key reasons for the upgrade.
Titan’s rating has been upgraded to ‘overweight’ from ‘equal-weight’ and its target price has been hiked to Rs 3,876 from Rs 3,532 per share. The brokerage sees it as a strong player in the premium consumption space.
Jubilant FoodWorks has also moved to ‘overweight’ from ‘equal-weight’, with its target price raised to Rs 781 from Rs 620, due to its recovery within the food discretionary segment.
“Both Titan and Jubilant are well-positioned to thrive, owing to their strategic efforts that build growth visibility,” Morgan Stanley said.
The upgrades are based on three key factors — Strong customer loyalty despite weak market conditions, the ability to reinforce their core business strategies, and their ability to grow market share.
Titan’s steady growth model, which focuses on capturing a larger share of the gold and jewellery market, stands out as a key differentiator, Morgan Stanley said. As competition eases and gold prices stabilise, Titan is well-positioned to benefit from this growth model, which is expected to deliver long-term value, Morgan Stanley said. On the other hand, Jubilant FoodWork’s recent recovery, driven by regional focus, innovation, and cost-cutting measures, like the removal of delivery charges, has allowed it to outpace its peers, it added.
Both companies are yet to disclose their december quarter results. But Titan had indicated in its Q3 update earlier in January that it had reported a 25% year-on-year (y-o-y) growth in its domestic jewellery business in Q3 buoyed by a strong festive season, higher gold prices, and wedding-season purchases.
While margin concerns persist, the companies’ long-term growth potential and ability to expand market share will drive investor returns, according to Morgan Stanley.
Shares of Titan and Jubilant FoodWorks both rose over 3% on Friday on the BSE. Titan shares closed trade 3.59% higher at Rs 3,489.70 apiece. Jubilant FoodWorks’ stock was up 2.13% to Rs 703.65 a share at the end of trade on Friday.
Out of 34 analysts tracking Titan, 19 maintain a ‘buy’ rating, 10 recommend a ‘hold’ and five suggest ‘sell’,
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