Q2FY24 Preview: Titan Company: Revenue seen at Rs. 97,491 million, PAT at Rs. 8,178 million

2 Nov 2023 , 09:36 AM

Result date: November 3, 2023

Recommendation: Buy

Target price: Rs. 3,350

Titan Company (Titan) may buck the trend (of weakness in discretionary sector) and post robust sales growth, owing to studded activations, believe analysts at IIFL Capital Services. Despite adhik maas in the September 2023 quarter, analysts at IIFL Capital Services expect Titan to report robust sales growth of 18% (ex-bullion), on the back of studded promotions in the quarter. This will also be supported by rapid store additions, leading to continued new buyer growth. Watches division sales growth is expected to come at 13% over the year-ago quarter. Eyewear division sales is expected to rise by 9%.

Jewellery EBIT margin (ex-bullion) is expected to expand 100 basis points sequentially to 12%, driven by higher studded share; but will be down 130 basis points over the year-ago quarter due to higher discounting/competition on pricing. EBIT margin of the watches division is estimated at 13%, down 184 basis points compared to the year-ago quarter. EBIT margin of the eyewear division is expected to contract by 124 basis points over the year-ago quarter to 16%.

Profit After Tax (PAT) could decline 5% over the year-ago quarter.

Important management insights to watch out for:

• Demand trends across products during festival season
• Outlook on margins

Rs. Million	September 2023 estimates	YoY change
Revenue	97,491	17.3%
EBITDA	11,941	(3.2)%
PAT	8,178	(4.6)%

Source: IIFL Research