Titan Company Q3FY22 Preview: Revenue seen at Rs94,582 million, PAT at Rs8,204 million

24 Jan 2022 , 08:19 AM

Result date: 3rd February, 2022
Recommendation: Add
Target price: Rs. 2,900

Watches-to-jewellery maker Titan is all set for a blockbuster quarter — a trailer of which was provided in the company’s business update for Q3. Strong performance will be helmed by the jewellery business which benefited from higher number of walk-ins and conversions during the quarter. Further, ticket sizes in this segment have remained 15% higher as compared to pre-COVID levels reflecting the inherent force of this momentum. Company added 14 new jewellery stores in the quarter, taking the total tally to 428 stores as on December 31, 2021.

Watches and wearables too grew at a rapid pace of 28% on a YoY basis and was aided by continued premiumization within this segment. Eyewear grew 27% and was driven by healthy momentum in sunglasses and frames along with improving demand for international brands.

In this scenario, revenue growth remained solid at 29.8% as compared to the same quarter of last year. EBITDA margin is likely to come in at 12.6% versus 11.8% in the year ago quarter. Net profit growth is pegged at a robust 47.6%.

Important management insights to watch out for:
– Short-term and medium-term demand trends across segments
– Margin drivers

Rs. Million	December 2021 estimates	YoY change
Revenue	94,582	29.8%
EBITDA	11,919	38.9%
PAT	8,204	47.6%

Source: Company, IIFL Research

	Sales growth (% YoY)	EBIT Margin (%)
Jewellery (ex-bullion)	37	12.5
Watches	28	13.0
Eyewear	27	16.0

Source: Company, IIFL Research