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%....

Jewellery demand. For 4Q19, we estimate 19.5% Jewellery sales growth and 13.5% volume growth led by sustained market share gains. We expect 11.3% sales growth in watches with 15% EBIT margin led by benefits of...

The company achieved overall sales growth of ~21% in FY19. Jewelry sales grew by~22% after increasing by 25% in FY18, thereby exceeding the originally envisaged 20% five-year sales CAGR target for the second consecutive year .

18.8% over last year. The income figures are not comparable as the income last year was post a December 2018 grew by 25.8%, to Rs.1532 crores. During the quarter there was an additional provision of Rs. 70 crores made for investments as part of Treasury operations in inter corporate...

Overall revenues grew 35% YoY to | 5871.5 crore (I-direct estimate: | 5239.4 crore). Supported by healthy festive season and successful exchange programme, the jewellery division reported robust revenue growth of 37% YoY to | 4997.0 crore (highest ever quarterly revenues). The watches segment sustained its revenue trajectory with growth of 18% YoY to | 646.6 crore. Revenues from eyewear division grew 43% YoY to | 129.5 crore Adjusting for IL&FS; provision (| 70 crore), EBITDA margins for the...

We reiterate a NEUTRAL rating with DCF based TP of Rs 900/sh (implied P/E of 38x Dec-20E EPS). Titan delivered a stellar quarter considering most big-box jewellers grew at 13-15% in 3Q; albeit one-offs impacted profitability. One-offs include a Rs. 700 mn provision towards IL&FS; exposure (Total exposure of Rs. 1.45bn, Rs 290 mn provided for in 2QFY19). Titans revenue grew by 34.6% (vs est. 30%). Adj. EBIT/APAT growth at 61/66% resp. to Rs 6.2/4.6 bn (a 13%/19% miss). Jewellery biz grew by ~37% (est. 32%) to Rs 49.9bn as all variables moved with clockwork precision (volume/price/mix grew ~20/8/9% YoY). Beat on revenue was on account of large institutional order for gold coins worth Rs 2bn for 3Q. Expansion in margins were even more pronounced +290bps to 12.9 % (194bps beat) due to 1. higher GM led by inventory valuation loss reversal from 2Q (Rs 180mn), 2. lower discount and 3. lower ad-spends.

We maintain positive stance on Titan post 3Q results given 1) the guidance of 22% jewellery sales growth and opening of 40 Tanishq stores in FY19 2) expected gains from backward integration and proactive strategy in Eyewear and 3) success of new collections in watches. QTD sales in 4Q grew by ~18%...

Robust jewelry growth of 37% was aided by a strong festive season and the activation of the gold exchange scheme. Higher volatility in gold prices may pose a risk to consumption demand in the near term, in our view. However, Titan's strong position vs. peers and execution with a focus on multiple growth drivers offer good visibility. Profitability across the divisions was mixed with margins in watches being impacted by high ad spends. Management continues to maintain a 15% EBIT margin target for the division. Jewelry margin expansion was impressive, but was partly supported by inventory gain and lower ad spends. The focus remains on growth, and share gains can...

ICICI Securities Ltd | Retail Equity Research In its quarterly preview of Q3FY19, the management of Titan highlighted that healthy revenue growth was witnessed across all its divisions, signalling robust customer demand in the festive season of DiwaliDussehra. The jewellery division continued to gain market share driven by rapid store expansion and strong same store sales growth (SSSG). The management now expects the jewellery division to exit FY19 with revenue growth of 22% (vs. earlier guidance of ~20%). The watches division continued on its healthy trajectory driven by launch of new...

4 January 2019 Jewellery segment capitalized well on seasonal strength to report robust growth in 3QFY19. Management cited that the segment expanded its market share on account of robust same-store sales growth. Prescription Eyewear business also sustained growth momentum due to its strategy of offering more assortments at affordable price points and aggressive marketing spends. Management stated that the category continued delivering a strong performance on account of rapid store expansion, increasing affluence of customers in middle India, and strong consumer demand on account of the festive season of Diwali-Dussehra. The company also indicated that same-store sales growth remains very strong and that market share gains continue. In 3QFY19, TTAN added 11 new stores (65k sq. (collection of Heritage and Antique gold jewellery) during the quarter, which has received good customer response. Watches division reportedly continued its healthy growth momentum in 3QFY19, led by the focus on new designs and marketing spends.

In an encouraging sign, wedding season demand is scaling up well for TTAN. This should uplift management confidence as it had guided for healthy growth (25-30%) for 3QFY19 but refrained from commenting on the fourth quarter performance. In our view, if consumers continue flocking to its stores in the wedding season, Jewelry sales growth of 25% for the full year is achievable (note that TTAN had guided for Jewelry sales growth of 25% at the start of the year but lowered it to ~20% later).