Q4FY22 Preview: Titan Company: Revenues seen at Rs69,418 million, PAT at Rs5,723 million

2 May 2022 , 11:13 AM

Result date: 3^rd May, 2022
Recommendation: Add
Target price: Rs2,800

March 2022 has been a soft quarter for Titan Company, amid headwinds such as Omicron virus, weak consumer sentiment in the jewellery business and emergence of macro pressures amid geo-political tensions.

The company’s jewellery business reported 4% decline in sales, despite ~6% gold inflation over the year-ago quarter. This was due to a sharp rise in gold prices and weak consumer sentiment. Customer conversions and ticket sizes grew marginally but were offset by the slight decline in walk-ins.  Overall number of jewellery stores (Tanishq, Mia and Zoya) increased by 16 sequentially to total stores of 444.

Watches & wearables clocked sales growth of 12% over the year-ago quarter, amid strong traction in the Titan brand across all offline channels. Growth of this section was aided by new launches.

Eyewear clocked sales growth of 5%, led by sunglasses and frames.

CaratLane clocked a sales growth of 51%. Nine more stores were added in this format, taking the total to 138.

Company’s EBITDA growth is pegged at 9.6% on a year-on-year basis.

Profit After Tax (PAT) could grow 8.2% over the year-ago quarter.

Important management insights to watch out for:

• Outlook on demand across all segments and markets
• Trends in gold prices and pricing action planned

 

Rs Million	March 2022 estimates	YoY change
Revenue	69,418	(2.7)%
EBITDA	8,711	9.6%
Profit After Tax	5,723	8.2%

Source: IIFL Research