The long term bank loan facilities of the company received 'CRISIL AAA/Stable' rating. The previous rating was at 'Crisil AA+/Positive'.
The luxury goods company has a total bank loan facilities of Rs 2,850 crore and commercial paper of Rs 500 crore.
Crisil also reaffirmed the rating on the company's short term bank facility and commercial paper programme at 'CRISIL A1+'.
The upgrade reflects Crisil's belief that business profile of the company will continue to improve over the medium term on account of dominant market position in jewellery retail segment, aided by healthy store additions and strong financial profile, the rating agency said.
In addition, the watch segment is expected to witness healthy growth while sustaining the improvement in profitability.
"Titan being the market leader in jewellery segment through its 'Tanishq' branded stores, is expected to continue its better than industry growth. Titan has outpaced revenue growth of other large jewellery retail players rated by CRISIL. Between fiscals 2016 and 2019, revenues grew at a compounded annual growth rate (CAGR) of 21 per cent," Crisil said.
Strong brand image and trust coupled with ability to provide wide range of designs and robust business model aided Titan's growth, it added.
It further said that though growth moderated to 9 per cent in the first half of fiscal 2020 as industry got adversely impacted by sudden surge in gold prices in mid-June 2019 and cautious bank lending to the sector. Demand is expected to be better in the second half of fiscal 2020 on account of festival, wedding sales and consumers adjusting to the new normal of higher gold prices.
The company is expected to maintain operating margins at 10-12 per cent on the back of industry leading gross margins and good mix of studded products of around 30 per cent of total sales, it said.
Stocks of the company, however, declined on Tuesday and around 1.47 p.m., they were trading at Rs 1,162.45, lower by Rs 25.15 or 2.12 per cent from its previous close.
( With inputs from IANS )