estimates due to overseas investments and wage settlement Titan Company Limited reported a growth of 14.5% in topline during Ql of FY 2019-20. The sales income grew from Rs.4269 crores last year to Rs.4885 crores in Q1 FY20. The profit...

While there is no questioning the execution skills of the outfit, its no See's Candy as Titan operates in a put-up-more-to-earn-more' industry. The entire cumulative CFO (ex-working capital) has gone towards working capital and capex needs over FY14-19. All Plausible tailwinds baked. Our DCF bakes an 18%+ market share in jewellery in FY30 already! TTAN has corrected nearly 25% from its peak and it could well be on its way to more palatable valuations; the stock isn't there yet, though. We maintain our Neutral stance on the name. Growth hits a pit-stop. Back-ended expansion increases want from productivity increase if Titan has to scrape through its guided 22% growth This may be a stretch even for Titan given elevated gold prices and weak consumer sentiments. We have a DCF-based TP of Rs. 1020/sh.

As guided by the management in its pre-quarterly update, Titan reported moderate overall revenue growth of 15.7% YoY to | 5151.1 crore (well below their internal target of 20% growth). A significant surge in gold prices, weak consumer sentiments dented demand for the jewellery space (mainly in June). With the jewellery division reporting revenue growth of 14% in Q1FY20 and a muted Q2FY20, the company may fall short of achieving the 22% growth guidance for FY20. However, the management expects festive demand and green shoots to drive revenue growth from H2FY20 onwards....

Titan's net revenue grew 14.4% YoY to `49.4bn in Q1FY20, below our estimate. We believe the growth in the jewellery segment will remain muted (low double digits) in Q2FY20E. Nevertheless, we anticipate an increase in growth in H2FY20E, due to new store additions, customer acquisition, and anticipated improvement in overall economy. Also, as Titan is one of the largest players in the organized industry, with attractive products, we believe it will emerge as a winner of the shift from unorganised to organised. Further, the trend of buying jewellery for...

The revenue of Titan Company (Titan) grew by ~16% y-o-y driven by strong growth of 20% in the watches business and ~13% growth in the jewellery business. Flat margins in the Jewellery business; decline in the margins of the watches business and sustained losses in the eyewear business led to a 70 BPS decline in OPM (on a comparable basis). Mr. C K Venkat has been appointed as the managing director of the company and would lead the management team. Subsidiaries including Titan Engineering and Automation and Caratlane registered strong performance with over...

1QFY20 consolidated revenue grew 15.7% YoY to INR51.5b (v/s est. of INR50.7b). EBITDA increased 18.8% YoY to INR5.7b (v/s est. of INR5.3b) and recurring PAT was up 11% YoY to INR3.6b (in-line). Consol. gross margins remained flat YoY to 27.4%. Increase in other expenses as % of sales (+20bp YoY to 7.8%) and staff cost as % of sales (+10bp YoY to 5.5%) was offset by lower ad spends as % of sales (-50bp YoY to 2.9%). Thus, EBITDA margin expanded 30bp YoY to 11.1% in 1QFY20 (v/s est. of 10.3%). Consol. segmental performance: (a) Reported Jewelry sales were up 14.3%...

Large Institutional order drives revenue growth for watches The watches segment continued on its healthy trajectory (19% growth in Q1FY20) driven by large institutional order by TCS and activation in both Titan and Fastrack brands. The quarter also witnessed the launch of new products with tech-enabled wearable being the new growth driver. The...

Titan Company Limited (Titan) released its Q1FY2020 quarterly update, indicating moderating growth in its jewellery division due to increased gold prices (~8% y-o-y), which has further affected the soft demand environment. Titan registered modest growth of 13% in its jewellery division (upwards of 20% growth registered in some of the earlier quarters). However, it has maintained strong double-digit growth momentum in its other key divisions, watches and eyewear. The stock has already corrected by 10%, which is mostly factoring...

8 July 2019 TTAN delivered lower-than-targeted Jewellery sales growth of ~13% YoY in 1QFY20 on account of the tough macroeconomic environment and high gold prices (particularly in June). In fact, the first half of the quarter was good in terms of sales, with 19% YoY growth till 7 May19 (as mentioned in 4QFY19 earnings call). However, gold prices increased toward the second half, which, in our view, led to demand postponement, impacting segmental growth for the quarter. collection of both plain and studded jewellery. Watches division sales increased 19% YoY in 1QFY20, partly aided by a large institutional order from Tata Consultancy Services (TCS). The division saw its semi-annual activation in both Titan and Fastrack brands during the quarter. Eyewear division also saw activation during the quarter, which helped achieve revenue growth of ~13% YoY. Growth in trade channel exceeded that in overall division in 1QFY20.

sustain in FY2020: FY2019 was yet another fiscal of strong performance for Titan with revenue and PAT growing by 23% and 35%, respectively (OPM improving by 80 BPS to 11%) during the year. This was mainly on account of strong performance by three key business verticals jewellery, eyewear and watches, which delivered 15-23% revenue growth during...

by 22.7% to Rs.1,927 crores. This is after 100 % provision for investments in inter corporate deposits amounting to Rs.145 crores made in IL&FS; and impairment of investment in its Swiss subsidiary Favre Leuba, amounting to Rs. 70 crores (exceptional item)....

View: Robust revenue growth continues. Maintain Buy The net revenue grew 19.3% YoY to ` 46.7bn, in line with our estimate. We believe the growth in jewellery segment will continue, despite an unfavorable base, due to new store additions and customer acquisition. Also, as Titan is one of the largest players in the organized industry with attractive products, we believe it will emerge as a winner of the shift from unorganised to organised. Further, the trend of buying jewellery for fashion, instead of investment, will enhance premiumization. We have...

We attended Titan's (TTAN) Annual Investor Forum 2019; key takeaways: TTAN's jewelry segment growth target for FY20 is ~22%, and if achieved, it will be the third consecutive year of faster than targeted growth. At end-FY17, TTAN had guided for 20% CAGR over five years. Of the 22% targeted jewelry segment growth in FY20, 14% should be supported by SSSG. Therefore, after FY18 (16% SSSG of the 25% growth) and FY19 (16% SSSG of 22% growth), FY20 will be the third consecutive year when SSSG will contribute over 60% to sales growth. This augurs well for operating margins....

up in Eyewear and 3) seeding of new businesses like Taneira and Skinn. We maintain positive stance on Titan post Mgt interaction given guidance of 22% sales growth in Jewellery, double digit growth in watches and sustained growth and scale up in other ventures. Jewellery business is focusing on increasing share through high value jewellery, distribution expansion in tier2-3 cities and growth in brands like Mia and caratlane. Tanishq is best placed to capture the move from unorganized sector given strong brand, trust on TATA name and increasing...

While there is no questioning the execution skills of the outfit, its no See's Candy as Titan operates in a put-up-more-to-earn-more' industry. ~96% of the cumulative CFO (ex-working capital) has gone towards working capital and capex needs. This acts as gravity to Titan's punchy valuations of 43x FY21E EPS multiples. Also, the want from growth and its longevity is massive to justify the same. Peers too are expected to catch up on the design and capital curve over the medium to long-term. Channel check suggests that most big-box jewellers performance was a mixed bag (-5 to 20% in 4Q). In this backdrop, Titans 4Q performance seems commendable. Big-box peers inability to fix their debilitating capital pangs continues to benefit Titan. We largely maintain our EPS estimates FY20/FY21. However, opportunistic aggression in expansion plans by Titan poses an upside risk to our estimates. We maintain our DCF based TP of Rs 990/sh (implying a P/E of 39x FY21E EPS). Reiterate NEUTRAL.

Jewellery continues to glitter in FY19, despite headwinds The jewellery division reported robust revenue growth of 22.3% YoY to | 4105.4 crore, driven by healthy like-to-like sales growth of 14%. The grammage growth was at 15% while gold prices were up 7% YoY to | 3102/gram in Q4FY19. The division reported inventory valuation loss of | 37.0 crore, which is expected to be largely reversed in the next quarter. Adjusting for the same, EBIT margins for the jewellery division improved 50 bps YoY to 13.0%. FY19 was a challenging year for the jewellery industry...

adjusted profit after tax (PAT) grew by 30.4% y-o-y to Rs. 404.2 crore (in-line with our expectation of Rs. 403 crore for the quarter). Jewellery business retained its strong footing, with 21% revenue growth. Eyewear business grew by 20%. Gross margins, however, declined marginally by 150BPS to 27.9%. OPM marginally increased by 21BPS to 10.8% due to operating...

completely written-off after INR460m provision in 4QFY19), (b) the transient inventory valuation impact of INR370 (to be reversed in 1QFY20) and (c) the one-off ex-gratia payment of INR350m EBITDA is up by 29.9% YoY (margin up 100bp YoY to 11.6%, 30bp ahead of estimates) and PAT by 29% YoY. Since these costs are not extraordinary, we continue using the reported numbers in our model. However, the above adjustments indicate that the underlying performance is far healthier than what the numbers are reflecting. Concall highlights: (1) YTD growth (up to 7th May) in Jewelry is ~19% YoY. (2)...

After five consecutive years of single digit revenue growth, the watches division registered a turnaround in FY19 with 16% revenue growth. The division strengthened its smart watches product portfolio with number new launches. Smart products including wearables grew at 80%+, crossing the landmark of | 100 crore in FY19. On a net basis, the division added six WOT stores, eight Fastrack stores and eight Helios stores in FY19. For the eyewear division, the management's strategy to increase assortment at more affordable points have worked out well in FY19 with revenue growth of 23%....