Target: ₹2,832
CMP: ₹2,538.9
We are changing FY22/23/24 EPS by 5.3 per cent/0.1 per cent/-2.4 per cent of Titan Company and reiterate Buy with DCF based target price of ₹2,832 (earlier ₹2,907).
Titan reported one of the best quarters on the back of: strong jewellery demand driven by festive purchases (buyer/ volume growth of 32 per cent/ 47 per cent); Margin expansion in jewellery led by 100bps gains in jewellery margins due to higher diamond prices and lower GHS sales and operating leverage; Accelerated store openings in Eyewear (net 53 added); and sustained momentum in watches and other categories.
Although Titan reported 14.6 per cent jewellery margins and despite a strong demand environment at least till April, we believe sustainable margins to be 12-13 per cent.
We believe Titan is well placed to capitalise on long term growth opportunities led by: jewellery share gains due to network expansion, regional thrust and hallmarking benefit; Omni-channel strategy across; jewellery, watches and eyewear; new growth drivers like Caratlane, TitanEye+, Taneira; and entry into high growth segments like smart watches, over the head headphones and Truly Wireless earphones.
We estimate 23.5 per cent PAT CAGR over FY22-24 and remain positive given structural story on account of market share gains, strong balance sheet, franchisee based model and strong brand.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.