Why This Tata Stock Is Upbeat Today

Titan‘s share price started the week in the green on Monday morning as the company announced raising stake in its subsidiary CaratLane late last week.

What Happened: On Saturday (Aug 19), the Tata Group company informed the exchanges that it has entered into a Share Purchase Agreement today to acquire the entire 91.90 lakh equity shares held by the founder of CaratLane Trading Private Limited (CaratLane) and his family members representing a 27.18% stake.

The ₹4,621 crore deal would see Titan’s 71.09% stake go up to 98.28%. The two entities were in discussion over the residual stake for months. The acquisition still needs approval from the Competition watchdog.

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Global analysts seem impressed by the acquisition. JP Morgan maintained its ‘overweight’ rating on the stock with a target price of ₹3,260. The global research firm said that the acquisition was value-accretive in the medium term adding that CaratLane is a highly growing business and provides an opportunity for healthy revenue and margin growth.

CLSA also maintained its ‘outperform’ rating for the stock with a price target of ₹3,270. The global brokerage said that the acquisition shows the company’s focus on building Caratlane as an integral part of its Jewellery business.

HSBC maintained its ‘buy’ rating on the stock with a price target of ₹3,580. The target indicates an over 16% upside from the stock’s last closing price of ₹3,050.45. Macquarie also maintained its ‘outperform’ rating on the stock with a price target of ₹3,400.

Price Action: Titan’s share price was up 0.28% to trade at ₹3,059 at market open on Monday.

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Posted In: M&APrice TargetReiterationAnalyst RatingsCaratLaneTata GroupTitan