HDFC Securities' research report on Titan
While Titan continued to clock healthy revenue growth of INR 103.6bn (up 33%; 4- year CAGR: 21%; HSIE: INR 98.8bn), the margin fell short of expectations. Jewellery sales (ex-bullion; standalone) grew 23.5% (4-year CAGR: 18.4%) in Q4FY23 as both the number of buyers and ticket sizes aided growth. Non-jewellery growth of 31% YoY (4-year CAGR: 13%) remained healthy too (in-line). However, overall profitability disappointed. Consolidated jewellery EBITM, at 11% (vs HSIE: 11.7%), declined 20 bps YoY as (1) competitive intensity continued to keep gold price premium in check; (2) benefits from high diamond prices continued to wear off; and (3) low-margin gold ingots increased in the mix. Non-jewellery profitability disappointed too.
Outlook
We maintain our FY24/25 EPS estimates and REDUCE rating with a DCF-based TP of INR2,400/sh (implying 47x Jun-25 P/E). Note: TP change is a function of DCF rollover.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
