Fundamental and technical analysis of TITAN COMPANY ltd. Calculating CAGR and Cash flow for the company. Finding out the trends in various parameters and drawing out the conclusions. Doing technical analysis for 3M,1Y,5Y,15Y using various charts, identifying different patterns in price trend, checking the price volume trend. Data for the past 10 years is considered in the project.

1. TITAN COMPANY LIMITED
COMPANY INFORMATION
TitanIndustriesLtdisIndia’slargestmanufacturerof quartzwatchesandthe world’s sixthlargest
manufacturerof brandedwatches.Itisa jointventure betweenthe TataGroup andthe Tamil Nadu
Industrial DevelopmentCorporation. Titan’score businessismanufacturingof watches.Inthe watch
segmenttheyhave brandslike Fastrack, Sonata,Nebula,TitanRaga,Octane,Zoop& Xylys -- a swiss
made cateringto premiumsegmentof the market.
Titanhas acquired licence formarketing&distributionof TommyHilfigerandHugoBoss watches.In
the jewellerysegmenttheirbrandTanishqhasa wide range of diamond,goldandplatinum
jewellery.UnderTanishqare collectionslikeZoya,Aria,Moham, Aleya,Kudan&polki & manymore.
Titanhas alsoventuredinthe eyewearsegmentThroughtheirFastrackbrand.Theyhave also
introducedbrandsTitaneye+thathas wide range of contact lenses,prescriptioneyewear& sun
glasses.Furthertheyhave alsoventuredintoautomationsolutionthroughTitanAutomation
Solution(TAS) andalsoindesigning&manufacturingof trophiesthroughTitanTrophe. The company
alsoin the businessactivitiesof Watches,Jewellery.
Today, Titan CompanyisTata Group's largestconsumercompany.

2. CHANAGES IN PERIOD AND NOTES
1) EQUITY PAID UP CAPITAL
Titanhas an EquityPaidup Capital of Rs443.9 crores. In2012-13 Companyraiseditscapital to
Rs 887.8 Croresby exchanging sharesbymoneyinthe PrimaryMarket,directlytothe investors.
AfterwhichCompanydidn’traise anyfurtherCapital frominvestors.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EquityPaidUp Capital 443.9 443.9 887.8 887.8 887.8 887.8 887.8 887.8 887.8 887.8
2) SHARE HOLDING PATTERN
ShareholdingPatternshowshowthe total numberof sharesequityoutstandinginthe companyis
dividedbetweenvariousowners.In2010, Promotersshareholdingwas53.12% and PublicHolding
was 46.88%. There wasa minorincrease inPromotersin2011 butit alwaysfluctuatesaround54%
and Publichad46% holding.A HigherPromoterStake usuallymeansthatthe Promotershave belief
that the companyhas potential forGrowthinthe Future and itis requiredtodisclose the patternto
the Stock ExchangeseveryQuarter.
3) ROE%
Companyhada Returnon Equityof 41.97% in Fiscal Ending2011. It has 7.42% more R.O.E% than the
previousyear.ROEisa measure of efficiency.A RisingROEsuggeststhata companyis increasingits
abilitytogenerate profitwithoutneedingasmuchcapital.FallingROEisa problemwhichCompany
facedafter2012 till now.HigherROE isalwayspreferredoverlow.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
ROE % 34.55 41.97 41.39 36.9 29.36 26.61 20.08 17.66 22.38 22.23
4) NET PROFIT MARGIN %
The NetProfitMargin indicateshowmuchnetincome a companymakeswithtotal salesachieved.
Companyhad an NPMof 5.20% in2010 and it increasedtill 2013. In2013, NPMis7% Indicates
companyismore efficientatconvertingSalesintoActual profit.Butin2014, it fell by0.20% then
rose by 0.10% in2015 and fell again.Company’sNetProfitMargin wasvery fluctuatingbetween
2010-2019. In 2019, it Stoodat 7.50%.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
NetProfitMargin % 5.2 6.1 6.6 7 6.8 6.9 6.1 5.9 7.9 7.5
5) EBITDA MARGIN
There isno specifictrendcanbe detectedinEBITDA Margin. It was fluctuatingbetween2010-2019.
However,amajordrop was there in2014. The marginwas negative inthatyearand feel to -
0.050323364. A lowEBITDA marginindicatesthata businesshasprofitabilityproblemsaswell as
issueswithcashflow.EBITDA Margin keptrisinganddecliningafter2014 but wasalwayspositive.a
relativelyhighEBITDA marginmeansthatthe businessearningsare stable.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EBIDTA
Margin 0.071247 0.159967 0.017558 0.054191 -0.05032 0.042544 0.05103 0.136029 0.019116 0.0657

3. 6) SALES
The graph depictsthatthe salesof the companyplungedoverthe giventime period.In2011-12
salesincreasedby35.42% amountingtoRs.24000.1. In the subsequentyearsi.e.2012-13 growthin
salesfell by48.52% and thiscontinuedtill 2015. In 2016, Titan ltd.had recordedanet sale of
Rs.1,11053.8 whichwas Rs.8313.3 lessthanthe previousyear.Afterwhich,salesof the company
boostedup.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sales 47,986.50 65,708.60 89,708.70 1,02,063.60 1,09,551.50 1,19,367.10 1,11,053.80 1,29,988.70 1,56,558.50 1,90,699.70
7) NET PROFIT
In 2010, Company’snetprofitstoodat Rs. 250.32 Crores.Entitymade a growthof 71.94% in
Revenue inFiscal yearending2012. NetProfitgoesupyearby yearbut in2016, Co. 's Businessis
affectedbecause of External Factorsdue towhichitsProfitfallsbyRs125.5 crores.In the verynext
year,Titan made a huge profitof 64.29 croresand it increasesy-o-ybasis.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
NetProfit 250.32 430.42 600.15 725.18 741.14 823.07 697.57 761.86 1162.87 1374.36

4. 8) SHARE PRICE
The price movementof a stockindicateswhatinvestorsfeel acompanyisworth.The trendin share
price isalwaysincreasinginthe periodbetween2010-2019 excepta slightfall in2013 and 2015.A
fall inshare price meansthe companymust sell additional sharesof stocktoraise the same amount
of proceeds.Thatmeanswhenastock price isdepressed,doingstock-baseddealsgetsmore
expensive.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Share Price 150.41 208.79 251.87 243.25 361.28 352.68 382.75 667.57 923.37 1187.37
RELATIONSHIP BETWEEN NET PROFIT AND SHARE PRICE
The correlation coefficient between Net profit and Share Price for TITAN Company Ltd for
period 2010-2019 is 0.915. This implies that there is a very strong positive relationship
between Net Profit and Share Price of the company. It is evident from graph that both the
parameters moved almost in same direction during the given time period. When the net
profit of the company is rising, share price also increases. It indicates about the boosting
growth of the company and also about the profitability of the company.

5. 9) FREE CASH FLOW
The free cash flowof the companyisshowinga lotof ups and downsinthe giventime period.There
was a sharp decrease inthe free cashflow in2018 to Rs.350.01 Cr. the negative free cashflow can
be there because "extra" moneyisconsistentlyreinvestedforgrowth.Thenthe negativenumberisa
reflectionof thatgrowthstrategy.Andinthe succeedingyear there was asharp increase to
Rs.979.57 Cr. Havingtoomuch free cash flow may alsoindicate thata businessisnotproperly
leveragingitsassets,asexcessfundscouldbe puttowardexpansion.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Free CashFlow 297.12 988.14 0 284.13 -765.87 295.57 323.91 1461.25 -350.01 979.57
10) DIVIDEND HISTORY
Whenwe lookat the dividendhistoryof the company,itcanbe seenthatthe dividendin2010 was
Rs.15 cr. and itfell drasticallytoRs.1.25 Cr in2011. This may be due to Debt Reductionorreinvesting
profitsetc.After2011, the dividendwasstagnantfor2013-14 and it hasshownan increasingtrend.
A dividendboostwasthere after2014.Since a dividendrepresentsaportionof companythatis
beingpaidtoshareholders,newsof adividendincreaseistypicallyviewedasa positive development
because itsuggeststhatthe companyis confidentinitsfuture.Itindicates goodperformance of the
company.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
DividendHistory 15 1.25 1.75 2.1 2.1 2.3 2.2 2.6 3.75 5
11) EARNINGS PER SHARE (EPS)
A sharpdecline of 91% inEPS can be seenin 2011. Afterwhichthe EPS of the company started
increasinggraduallyandkeptincreasingtill 2019.EPSshowshow much moneyacompany makesfor
each share of its stock.So,a higherEPSindicatesmore value becauseinvestorswill paymore fora
companywithhigherprofits.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EPS 56.4 4.8 6.8 8.2 8.3 9.3 7.9 8.6 13.1 15.5
12) RISE IN TOTAL RESERVES
The total reserves of TITAN COMPANYLTD. have shownanincreasingtrendinthe past 9 yearsfrom
2010 to 2019. It has increasedfromRs.6799.9 Cr in2010 to Rs.60929.4 Cr in 2019.Reservesare
consideredtobe the vital source of financingbyinternal means.So,whenthe companyisinthe
needof fundsforits businessactivitiesandformeetingthe company’sobligationsthe firstandthe
easiestpossible waytogetfundsisfromthe accumulatedgeneral reservesof the company.This
impliesthatthe performance of the companyisexcellent.
Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Risein Total
Reserves 6,799.90 9,809.90 13,611.20 18,760.90 24,351.70 30,032.30 34,459.10 42,232.30 51,052.10 60,929.40

6. 13) D: E RATIO
The D: E ratio of the company hasshowna decreasingtrendtill 2013. In 2010 D:E ratiowas 0.1 and it
decreasedto0.003 in 2013. In2014 it rose by 99.05% to 0. 319.It alsomeansthatthe companyhas
beenaggressive infinancingitsgrowthwithdebt.In2015 and2016 there was nochange inthe
ratio.Afterwhichinnextyear there wasa sharp increase inratioby 93%. This alsoimpliesthatas
the cost of debtislowerthanthe cost of equity,andthereforeincreasingthe D/Eratio(upto a
certainpoint) canlowera firm’sweightedaverage costof capital (WACC).Andthenin succeeding
yearsit keptincreasinganddecreasingbymarginal amount.
YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
D: E Ratio 0.1 0.066 0.008 0.003 0.319 0.032 0.032 0.433 0.309 0.37
14) DIVIDEND YIELD
Dividendyieldof the companyin2019 is 0.04(%).dividendyieldmeasuresstock’sannual dividend
paymentstoshareholders,expressedasa percentage of the stock’scurrentprice.A good dividend
yieldvarieswithinterestrates,general marketconditions,buttypicallyadividendyieldof 4to 6 % is
consideredquite good.Thismeansthe dividendyieldof the companyfor2019 is good.

7. TECHNICAL ANALYSIS
3 MONTHS TO 1 YEAR
Supportisa price level wherea downtrend canbe expectedtopause due toa concentrationof
demand.Resistance occurswhere anuptrendisexpectedtopause temporarily,due toa
concentrationof supply.
A “Headand Shoulder”patterncanbe observedin Mayin the lowerblockwithresistance level of
Rs.1210. A bullishtobearishtrendreversal canbe noticed. We cansee that the price risesto1149,
thenfallsto1137, thenrisesto1158, thenfallsto1137 and again risesto1149. Afterthatthe
companyfollowsanupwardtrendfrommid-June tillJuly andthe resistance isthenconvertedinto
support.
In augusta “double bottom”isformed withsupportlevelatRs.1028. It showsthatwhenthe price
reachesthe supportlevel,the price increasesascanbe seenfromthe above image. Thisisthe time
to buysecurities.The companyisshowingupward trendafterreachingsupportlevel.
Consideringvolume trend, asharpdecrease involume canbe seeninmidJuly2019. This can be
interpretedasaweakprice move.There isa large fall instock alongwithdecrease involume which
indicatesabullishmarket. Wheneverthere isaprice fall,there isfall involume too.The volume and
price have followedthe same trend.AfterNovember2019 there isnotmuch change in volume
trend.

8. 1 YEAR TO 5 YEARS (Feb’2015 – Feb’2020)
The stock isshowingan uptrend inthe price. Initiallynosignificantchange canbe seeninthe price
of the stock.A minordropcan be seeninlate 2017. Afterwhichthe price reachedto itsresistance
level.
A “double bottom’patterncanbe spottedin July2019. The supportlevel forthispatternisat
Rs.1073. It is a signal of reversal of potential uptrend. The price dropstosupportlevel before rallying
back up,and thenfallingtothe supportlevel again,before finallybeginninganew uptrend. Itshows
a bullishprice movement. A tradercantake a longpositionandcan benefitfromrisingstockprice.
A “double top”patterncan be observedafterJuly2019. It is an extremelybearishtechnical
reversal patternthatformsafteran assetreachesa highprice two consecutive timeswitha
moderate declinebetweenthe twohighs.However,the decline inprice duringthe formationof this
patternisnot steepbutgradual. The traders will earnprofitfromsellingstock.The sellingprice will
be Rs.1243. Thiscan be consideredasa special case of the “double top”. In thiscase people mayget
chance to revise theirexpectationsaccordingtofall inprice.
Consideringvolume trend, inJune 2017 we can see thatthere isa greenbar,whichindicatesan
increase involume andanincrease inprice. Thisisa goodsignand it impliesthatitistime tosell
securities.Afterthis,there isnotmuchchange involume.Duringthe beginningof doublebottom
there is red bar, whichindicatesadecrease involume.The simultaneousdecreaseinprice and
volume impliesthattrader’sindecisiontosell the stock.Italsoindicatesthattrendmayrise.
There isno significant change involume afterwards.

9. 5 YEARS TO 15 YEARS (Feb’2005-Feb’2020)
Here the companyhas followedanupwardtrendthroughoutthe period.The purplelinedenotesthe
supportlevel.A double toppatterncanbe observedduringthe endof 2019. The supportlevel isat
Rs.1025 and people will sell the securitieswhenthe price reachesRs.1334.
A significantincrease involumecanbe seenin2006 withmarginal increase inprice.Itisa good
signal tobuy the stock.It alsoindicatesuptrend.Approachingtowardsthe endof 2016 not much
volume canbe noticed. volume measuresthe numberof a stock'ssharesthat are tradedon a stock
exchange ina dayor a periodof time.After2014 notmuch tradingcan be seenas the level of
volume isverylow.