Q1 FY23 Preview: Titan: Revenue seen at Rs98,714 million; PAT at Rs7,978 million

4 Aug 2022 , 03:23 PM

Result date:  5th August
Recommendation: Add
Target Price: Rs2,400

Titan reported a robust quarter with volume per store normalizing to 90% of long-term average from ~80% in Q4FY22. Jewellery sales was supported by robust growth in both walk-ins and buyers. Studded mix improved both on YoY and pre-COVID basis.  Jewellery sales (ex-bullion) increased by 207% YoY and 23.2% on 3- year CAGR driven by robust sales on the occasion of Akshaya Tritya in May after two years of COVID-induced lockdowns in this period. CaratLane clocked a sales growth of 207% (54%, in terms of 3-year CAGR, versus 38% in the previous quarter).

Watches & wearables clocked sales grew by 158% YoY translating into a 3-year CAGR of 1.8% compared to 5.4% in the previous quarter. Healthy growth was witnessed across all brands and products with all the key channels of multi-brand retail, Titan world and large format stores continuing their growth trajectory from FY22.

Eyewear clocked sales growth of 176% YoY translating into a 3-year CAGR of 7.5% accelerating from 0.9% in Q4FY22, led by both Titan Eye Plus (TEP) and trade & distribution channels.

Analysts at IIFL Securities expect EBITDA growth of 21% on 3-year CAGR basis, which translates into EBITDA margin of 11.7% versus 10.7% in the previous quarter.

The company's Profit After Tax (PAT) could multiply strongly over the year-ago quarter.

Key management insights to look into:

• Updates on new store openings
• Outlook on expansion of international business
• Impact of hike in import duty on gold

Rs. Million	June 2022 Estimates	Y-o-Y
Revenue	98,714	203.8%
EBITDA	11,516	699.7%
PAT	7,978	1207.9%

Source: IIFL Research