Prabhudas Lilladher's research report on Titan Company
TTAN has reported 11% growth in Jewelry, 14% in Watches and 10% in Eyecare in a high base quarter. We estimate EBIDTA and PAT growth of 8.2% and 7.2% YoY. We believe double-digit Jewelry sales growth shows market share gains despite tepid demand led by 1) aggressive store expansion (22 in 3Q) 2) focus on studded and lighter jewelry 3) new ranges in wedding segment and 4) designs & campaigns to cater to regional tastes and preferences. Watches and wearables growth has been led by 3x+ growth in wearable sales, new launches and renovation of 81 WOT stores, which augurs well for coming quarters. We believe new businesses like Wearables, Taneira (Distribution and product range led), Carat lane (50% sales growth YoY) will continue to gain traction.
Outlook
We estimate 18% PAT CAGR over FY23-25 and arrive at a DCF based target price of Rs2875 (largely unchanged –Rs2869). We remain positive, however, expect back ended returns given rich valuations of 49xFY25 EPS. Retain Accumulate.
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