Q1FY24 Preview: Titan Company: Revenue seen at Rs. 103,358 million, PAT at Rs. 8,838 million

31 Jul 2023 , 01:52 AM

Result date: 2^nd August, 2023

Recommendation: Buy

Target price: Rs. 3,325 

Titan Company (Titan) posted strong revenue growth of 21% in the Jewellery business during the June 2023 quarter, following up on an already robust 23% growth in the March 2023 quarter. This was driven by robust Akshaya Tritiya sales in April and wedding purchases in June. Rapid store expansion has also helped the company acquire new customers, resulting in buyer growth being higher than average ticket size growth in Q1.  Watches and Eyewear sales grew by 13% and 10%, respectively over the year-ago quarter. Overall, Titan is expected to post revenue growth of 25% over the year-ago quarter, believe analysts at IIFL Capital Services.

EBIT margin of Titan’s Jewellery business is likely to contract by 150 basis points over the year-ago quarter to 12%, due to certain one-offs in the base quarter related to diamond price appreciation. Overall EBITDA could grow 12% in the quarter under review.

The company’s Profit After Tax or PAT could grow 11.5% over the year-ago quarter.

Important management insights to watch out for:

• Demand trends across urban and rural markets
• Outlook on store adds, pricing, input costs and margins

Rs. Million	June 2023 estimates	YoY change
Revenue	103,358	25.0%
EBITDA	13,055	12.2%
Profit After Tax	8,838	11.5%

Source: IIFL Research