Q3FY24 Preview: Titan Company: Revenue seen at ₹133,878 Million, PAT at ₹10,665 Million

30 Jan 2024 , 10:55 AM

Result date: February 1, 2024

Recommendation: Add

Target price: ₹3,700 

Titan Company (Titan) continued its strong performance in the December quarter, led by 23% (ex- bullion) year-on-year growth in the Jewelry segment. Growth was led by 21% growth in domestic business amid double-digit growth in buyers and some improvement in selling price. Growth in plain gold and coins in the festive quarter exceeded the studded sales growth, driven by higher consumer interest in gold despite the elevated prices and volatility. The company could post revenue growth of 22% over the year-ago quarter, believe analysts at IIFL Securities.

Titan’s Jewelry business’ EBIT margin could marginally contract by 10 basis points relative to the year-ago quarter to 12.5%. Watches division’s sales growth came in at 21% with EBIT margin expected at 12.5% — up 153 basis points over the year-ago quarter. Sales of the Eyewear division declined 3% on a year-on-year basis. This division’s EBIT margin is expected to contract by 340 basis points year-on-year to 15%.

The company’s Profit After Tax or PAT could grow 12% relative to the year-ago quarter.

Important management insights to watch out for:

• Demand trends across divisions, markets
• Margin drivers going forward

₹ Million	December 2023 estimates	YoY change
Revenue	133,878	22.1%
EBITDA	15,808	18.9%
Profit After Tax	10,665	12.1%

Source: IIFL Research