Company Overview
The Titan Company, a joint venture between the Tata Group and Tamil Nadu Industrial Development Corporation, was started in 1984. The company has grown to become a retail giant in India through its brands, Titan Watches, Sonata, Fastrack accessories, Tanishq jewelry and Caratlane among many others. The company is trying to grow its worldwide presence through collaborations with firms such as Mont Blanc and global influencers.
Balance Sheet
One of the main concerns in the balance sheet comes from the Rs. 7,000 crore inventory. Titan's in the watch industry, where the inventory is determined by the market price of their accessories. This means that as the prices of the goods fall, as the economic setbacks of the Covid-19 pandemic set in, Titan may see itself in a liquidity crunch due to its large short term borrowings. This is a cause of concern especially due to the fact that Titan is involved in the retail sector which is at the flux of this pandemic.
Income Statement
The best things from the Titan Profit and Loss account is the growth story behind this company. The firm has doubled its EBIT in the last 5 years, and will continue to show strong growth as the domestic consumer sector continues to thrive.
Conclusion The stock market is like a cricket game with no stumps behind you. You don't need to hit every ball, its a waiting game to find the right stock. The reason why I am coming to a quick conclusion with Titan is the major red-flag in its balance sheet. Amid the Covid-19 pandemic, I believe that this stock will be in some trouble. If you see an opportunity to enter this stock at a cheap price, while still ensuring its long term safety, this may be a good buy in the future. However, for now it is a Don't Buy from my side.
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