Saurabh Mukherjea Adds New Blue-Chip Stock To Marcellus’ CCP Portfolio

Saurabh Mukherjea has announced that Titan Company, the large-cap Blue-Chip stock, is the latest addition to the famous Marcellus’ CCP Portfolio.

Saurabh explained that Titan’s biggest strengths lie in its ability to: a) execute retail expansion whilst maintaining high store level and corporate level ROCE; and b) leverage on quality-oriented trust built around the Tata brand.

He pointed out that in addition to this, Titan has successfully strengthened its jewellery merchandise by expanding successfully into wedding jewellery, by expanding gold exchange (as a substitute for gold-on-lease) for a large part of their raw material procurement, and by acquiring a majority stake in Caratlane, an online jewellery franchise which is expanding rapidly, successfully and profitably across ecommerce, omni-channel and brick and mortar formats.

Titan Eyeplus has also been turned around through in-house manufacturing of the merchandise, closure of unviable store locations and tech investments to improve customer service, he added.

He also stated that the ongoing shift of market share from unorganised to organised jewellers is a significant positive for Titan. Covid-19 related disruptions faced by both mom & pop jewellers as well as smaller organised chains provides a significant tailwind to Titan in the form of market share gains over the next few years.

Saurabh emphasized that Titan's credentials as a CCP stock are impeccable.

The Company has delivered a revenue CAGR of 16% over FY10-20 and 17% over FY17-20. Earnings CAGR over the same time periods has been 20% and 53% respectively.

The average ROCE is 34% over FY17-20 and 42% over FY10-20.

"We expect the firm to deliver healthy and consistent earnings growth with ROCEs substantially higher than cost of capital over the long term in future," he stated.

The Marcellus’ CCP Portfolio already boasts of blue-chip behemoths like Asian Paints, HDFC Bank, Kotak Bank, Axis Bank, Bajaj Finance, Asian Paints, Berger Paints, ITC, Nestle, Pidilite, TCS etc.

Titan is a much deserving candidate for inclusion.

It is worth recalling that Titan is the flagship stock in the portfolio of Rakesh Jhunjhunwala, the Badshah of Dalal Street.

As of 31st December 2020, Rakesh and Rekha Jhunjhunwala hold 47170970 shares of Titan, worth a colossal Rs. 7255 crore at the CMP of Rs. 1538.