Q3FY23 Preview: Titan Company: Revenue seen at Rs105,892 million, PAT at Rs9,740 million

30 Jan 2023 , 04:53 PM

Result date: 2^nd February, 2023

Recommendation: Add

Target price: Rs 3,000

Titan Company (Titan) could post healthy revenue growth, benefiting from strong festival and wedding season as well as healthy store expansion. The Jewellery business (ex-bullion) grew by 11% YoY translating into a 3-year CAGR of 21%. Growth was driven by healthy new-buyer growths in the festive period, higher value purchases in the Studded category and unique new collections for the season.

Sales of Watches & Wearables grew 14% YoY with the 3-year CAGR accelerating to 9% from 5% in Q2. In Eyewear, sales grew by 10% YoY with 3-year CAGR accelerating to 9% from 3% in Q2. With regard to EBIT margin, in Jewellery division, analysts at IIFL Securities forecast margin of 13.3% from 13.6% in Q3FY22 (excluding 100bps one-off). Overall EBIT could slip 1.1% over the year-ago quarter.

Profit After Tax (PAT) could decline 1.3% on a YoY basis.

Important management insights to watch out for:

• Outlook on international business expansion
• Margin drivers going forward

Rs Million	December 2022 estimates	YoY change
Revenue	105,892	11.3%
EBITDA	13,842	(1.1)%
Profit After Tax	9,740	(1.3)%

Source: IIFL Research