Thursday 21 August 2014

Titan Company hits 52-week high on Morgan Stanley upgrade

Titan Company Ltd rallied as much as 6.4 per cent in trade on Thursday to hit its fresh 52-week high of Rs 368.70 with high volumes, after Morgan Stanley upgraded the stock to 'overweight' from 'underweight' call earlier. 

Apart from raising their rating, Morgan Stanley has also increased their 12-month target price on the stock to Rs 420 from Rs 330 earlier, which translates into an upside of over 21 per cent from Wednesday's closing price of Rs 346.25. 

Apart from raising their rating, Morgan Stanley has also increased their 12-month target price on the stock to Rs 420 from Rs 330 earlier, which translates into an upside of over 21 per cent from Wednesday's closing price of Rs 346.25. 

The stock also saw volume surge by over 46 per cent to 1,80,395 shares as compared to its average daily volume of 1,23,197 shares on the Bombay Stock Exchange. 

Titan has long been regarded as one of the best plays on India's long-term income and demographics story. However, the RBI's policy changes toward gold imports, in order to control the current account deficit (CAD), materially altered the business model and earnings visibility. 

In a recent circular, contrary to our expectations, the RBI eased some of the quantitative restrictions on the import of gold. This has driven the stock up 50% over the last six months (vs. 28% for the Sensex) With this move, the first leg of re-rating is complete, Morgan Stanley said in a report. 

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