Target: ₹4,150
CMP: ₹3,613.75
Titan Company’s jewellery division delivered another quarter of 20 per cnet y-o-y revenue growth and management remains confident of delivering 20 per cent annual growth in the medium term, despite a slowdown in other consumption categories. We think management’s confidence is well placed given the income trends of its target market and expansion opportunities available.
While margins were a bit disappointing, we do not see it as a concern. We think TTAN is uniquely positioned for market-share gains, with a large growth headroom. It is a part of our Affluent India stock list.
Slightly weaker-than-expected jewellery margins; growth and margin outlook remain intact Titan had previously disclosed its Q3-FY24 revenue. The EBITDA margin was slightly below our estimate because of lower y-o-y studded-jewellery contribution to jewellery division sales (24 per cent in Q3-FY24 vs 26 per cent in Q3-FY23), softness in new-buyer growth, especially in the low ticket-size category and higher competition.
The management said that the dip is temporary and has retained its mediumterm jewellery EBIT margin guidance of 12-13 per cent. Management is confident of delivering its FY27 jewellery revenue guidance which implies 20 per cent revenue CAGR over FY22-27.