MOSL: TITAN COMPANY (Buy)-Commendable result amid the lockdown, further recovery underway
TITAN COMPANY: Commendable result amid the lockdown, further recovery underway
(TTAN IN, Mkt Cap USD21.5b, CMP INR1800, TP INR2065, 15% Upside, Buy)
- Despite losing out on sales for a large part of May’21 due to the lockdowns across the country, TTAN reported a decline of only ~33% over 1QFY20 (normal) levels. This was to some extent aided by bullion sales of INR4.24b. Margin performance was also better than expected, led by cost savings and better than expected sales.
- Watches and Eyewear seem to be reporting a much faster recovery v/s that witnessed after the lifting of lockdown restrictions last year.
- With the recovery in Jun’21 continuing into Jul’21 as well, pent up demand and a healthy wedding season demand outlook appears attractive. We maintain our Buy
Strong beat on all fronts in 1QFY22
- Consolidated revenue grew 75.5% YoY to INR34.7b (est. INR29.2b).
- EBITDA stood at INR1.4b (est. INR299m) v/s a loss of INR2.5b in 1QFY21.
- PBT stood at INR390m (est. -INR654m) v/s a loss of INR3.6b in 1QFY21.
- Recurring PAT stood at INR180m (est. –INR654m) as against a loss of INR2.9b in 1QFY21.
- Consolidated gross margin rose 50bp YoY to 22.4%.
- As a percentage of sales, lesser other expenses (down 1250bp YoY to 8%), lower staff costs (down 410bp to 9%), but higher ad spends (up 30bp to 1.4%) led to EBITDA margin expanding by 1670bp to 3.9% (est. 1%).
- Segmental performance: a) Jewelry sales grew 67.2% YoY to INR30.5b. Segment margin rose 1,020bp YoY to 6.5%. b) Sales of Watches were ~4x YoY to INR2.9b, with an EBIT margin of -20.8%.
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.