MOSL: TITAN COMPANY (Neutral)-Remarkable growth in Jewellery-Margin below estimates
​Titan Company: Remarkable growth in Jewellery; Margin below estimates
(TTAN IN, Mkt Cap USD6.9b, CMP INR495, TP INR502, 2% Upside, Neutral)
- Titan’s (TTAN) 4QFY17 revenue grew 43.4% YoY (est. of +23.3%) to IN34.3b. EBITDA grew by 30.3% YoY to INR2.7b (In-line with estimates) and recurring PAT by 8.6% YoY to INR2.03b (est. of INR1.72b).
- Gross margin shrunk 420bp YoY to 25.1%, with EBITDA margin contracting 80bp YoY (est. of +80bp) to 7.9% in 4QFY17. There was a reduction of 290bp YoY in other expenses to sales to 8.2% and of 50bp YoY in staff costs to sales to 5.1%, partially offsetting gross margin contraction.
- Jewelry sales were up 55% YoY to INR28.6b (52% same-store growth), with segment margin contracting 140bp YoY to 9.9%. Gold tonnage increased 37% YoY in 4QFY17. Watches sales grew 10.8% YoY to INR4.98b, with 70bp EBIT margin expansion to 2.4%. Eyewear sales grew 13% YoY to INR1.1b. At the end of the quarter, the company had 1,366 stores with an area of 1.8m sq.ft.
- FY17 performance: Sales, EBITDA and adj. PAT were up 14%, 34.7% and 21.5%, respectively. Jewellery sales were up 17%, crossing INR100b mark, with segmental margins expanding 100bp YoY to 10.1%.
Titan is engaged in the watch division where Co. manufactures and sells a variety of watches with varying price range within India and overseas; in the jewelry division where Co. works through Tanishq and Zoya. Tanishq has a range of jewelry studded with diamonds or coloured gems in 18 kt gold, 22 kt pure gold and platinum; and Zoya is a chain of luxury jewelry boutiques; in the eyewear division where Titan Eye+ retails products which showcase contemporary designs, coupled with optical exams with Sankara Nethralaya; and in the precision engineering division, Co. sells its components globally and helps build machinery.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.