Titan Company Ltd. share price forecast

Titan witnessed a strong demand in terms of Jewellery in June after a slack month in May. In the Jewellery segment the Total Income saw a growth of 19% YoY with domestic operations growing at ~20% YoY.

Godrej Properties: Godrej Properties Ltd (GPL) reported subdued presales worth INR 22.5bn (-11/-44% YoY/QoQ), with a booking area of 2.3msf (-21/-57% YoY) with sustenance sales contributing 80%. The price realisation, however, was healthy at INR 10,018psf (+12.5%/+30% YoY/QoQ). It reiterated its target of achieving INR 140bn of presales in FY24, with 20msf of launches planned (1.09msf launched in Q1FY24). GPL added four new projects with a gross development value of INR 64.5bn in Q1FY24. The implied realisation of these new projects is INR 17,671psf. Net debt as a result of higher BD activity increased significantly to INR 53bn (INR 36.5bn in Mar'23), exacerbated by a lower collection of INR 19.5bn (+26/-48% YoY/QoQ), which in turn was low because of subdued launches during the quarter. The total GDV addition target for FY24 is INR 150bn to be funded through improving cash flow as launches pick up and there is more available headroom to increase its net D/E to 0.5x-1x. We reiterate ADD with a higher SOTP valuation of INR 1,664/sh (to account for higher BD activity and improving price realisation 5-10% more than the estimate). ACC: We maintain BUY on ACC, with a revised TP of INR 2,325/share (11x its Mar-25E consolidated EBITDA). It reported strong 23% YoY volume growth. Cement opex fell by 8% QoQ owing to a cool-off in input cost and lower fixed expense its benefit was partially offset by a 2% dip in realisation. Thus, unit EBITDA recovered INR 270/MT each QoQ/YoY to INR 811/MT. The long-pending Ametha integrated plant is expected in...

We are surprised at consensus' surprise about Titan's Jewellery margin glide path. We reiterate our view - Tanishq needs to reduce price premium (on gold, on making charges) to drive growth (see reports - link 1, 2). In 1QFY24, revenue growth in Jewellery at 19% YoY (22% SSSG) was healthy but must be seen in the context of 10% YoY retail expansion and 17% YoY inflation in gold price.

Titan continues to achieve new feat, recording stellar growth in Revenue of 25% YoY (Standalone) at ? 8,553 Cr with a 3 year CAGR growth of 25.1%. The Jewellery segment witnessed a robust Total Income growth by 24% YoY at ? 7,576 Cr along with domestic operations increasing by 21% YoY on the back of strong wedding season with over all high retail sales growth.

Petronet LNG: Our REDUCE recommendation on Petronet LNG (PLNG) with a TP of INR 228 is based on: (1) the adverse impact of high spot LNG price and (2) rising domestic gas production on spot LNG demand in the medium term. In Q4, reported EBITDA was at INR 9bn (-19% YoY, -44% QoQ) while PAT came in at INR 6bn (-18% YoY, -48% QoQ), below our estimates, impacted by lower-than-expected volume of 185tbtu (-3% YoY, +11% QoQ) and higher other expenses. Higher-than-expected other income supported earnings. CDSL: CDSL delivered lower-than-expected numbers, with revenue declining 11.6% QoQ, owing to a sharp drop in transaction charges (-23% QoQ) and IPO/corporate action revenue. The annuity revenue stream (~38% of revenue, 2.2% QoQ) is stable but growth will revert to the pre-covid rate of ~17% CAGR, following a strong (~60% YoY) growth in FY23. The pace of BO account addition has moderated but CDSL continues to gain market share (72.7% as of April-23). The company registered two years of solid growth (>50% YoY in FY21-22, driven by ~4/4x rise in transaction revenue/demat accounts), which flattened in FY23. We expect revenue to grow at ~14% CAGR over FY23-25E, driven by a recovery in market-linked revenue (~60%) and a stable annuity stream. The company will continue its investment in technology and it has incurred a capex of INR 1.7bn to expand the operations of its subsidiaries. We lower our FY24/25E EPS estimate by ~2% and maintain our ADD rating. We assign a SoTP-based target price of INR 985, based on 30x Dec-24E...

Jewellery segment revenue growth maintained healthy momentum (17% 4Y CAGR). SSSG at 19% is positive but was primarily driven by higher gold price (14% YoY). Despite volatility in gold prices (in Apr’23), strong festive-season-led revenue recovery (in second half) is comforting.

Titan Company has come a long way from pioneering in just branded wrist watches to creating an empire with several businesses (Jewellery, Wearables, Fragrances, Accessories and Ethnic Wear) under its roof. The company has reported decent numbers in the latest quarter with a YoY growth of 13.4% clocking in ? 11,383 Cr of Revenue.

The rise in (relative) competitive intensity in jewellery retailing led to melting-away of gold-rate premium charged by category leaders (vs historically) compared to competition. We observe that in key cities (top 9 cities which contribute ~30-35% of Tanishq’s total retail area), (1) premium charged by Tanishq has declined by ~50% (to 1-3%) from historical levels.

APL Apollo: APL Apollo Tubes' (APL) Q3FY23 revenue increased 34 % YoY to INR43.2bn, led by strong volume growth (+50.2% YoY). The blended realisation, however, declined 10.8% YoY due to a greater contribution of low-margin general structure products in the mix (44% in Q2FY23 vs 35% YoY). Accordingly, EBITDA/ton, increased 17% QoQ (-10.2% YoY) to INR4,510 as stabilisation in global commodity prices led to a reduction in destocking in China and positive operating leverage in Raipur. EBITDA went up 34.9% YoY to INR2.7bn, led by high volume, but the margin remained constant YoY. PAT increased 46.3% YoY to INR1.6bn, the highest for any quarter to date. Management is contemplating expanding the capacity even beyond 4MT through bottlenecking. APL is expected to benefit from the FY23-24 budget push towards infrastructure and railways. Accordingly, estimated improved sales mix supported by domestic steel price recovery, and enhanced government infrastructure spending should drive both volume and EBITDA/ton. Hence we maintain our TP of INR1,333 and earnings estimates and retain our BUY rating. Aditya Birla Capital: Aditya Birla Capital (ABCL) reported a mixed bag with the lending businesses clocking a strong performance and the non-lending businesses witnessing a soft quarter. Both the lending businesses have been gradually repositioned towards retail and granular loans (two-thirds of NBFC AUM is towards Retail + SME + HNI, 42% of the HFC AUM is towards affordable loans), reflecting in sustained improvement in franchise earnings (NBFC RoA nears FY24 target, HFC RoA is above FY24 target). While the LI business continued to build steady profitability (higher...