Titan Q4 preview: Brokerages expect double-digit growth in profit, revenue

Titan Company is expected to report double-digit growth across parameters in the quarter ending March 31. The Jewellery-to-watch maker will announce its quarterly results on May 8.

Its recent guidance for FY19 also indicated that trend. While the growth in jewellery business is likely to be in double-digits, an encouraging show from watches, eye wear and other segments was the key takeaway from the company's recent guidance.

For FY19, topline growth would be close to 22 percent year-on-year (YoY) as against a revenue uptick of 24.9 percent YoY in FY18, the company said last month.

According to brokerages, profit growth for the March quarter could be in the range of 19-37 percent and revenue may rise 15-23 percent backed by jewellery as well as watch & eyewear segments.

"We model (1) 24 percent YoY growth in jewellery segment revenues, (2) 17 percent YoY growth in the watches segment revenues driven by share gains and (3) 19 percent growth in eyewear," said Kotak which expects reported PAT growth of 64 percent and adjusted PAT growth of 37 percent on a revenue growth of 23 percent.

ICICI Securities, which expects 19 percent growth in profit and 17 percent in revenue, said despite a challenging scenario for jewellery players, Titan continues to gain market share.

Prabhudas Lilladher also said though industry consumption demand remained weak on increasing gold prices and financing issues, it expects good performance led by market share gain from unorganised players and traction form product activations.

"We expect Titan to continue the pace of its store openings."

At the operating level also, the performance is expected to be strong.

Kotak expects EBITDA margins to expand 200 bps YoY to 13.6 percent with strong margin improvement likely for watches and some increase in jewellery margins as well.

"We factor in EBITDA growth of 23.5 percent YoY for the quarter, with underlying margin expansion of 70bp YoY," Motilal Oswal said while Prabhudas Lilladher expects EBITDA growth of 20.5 percent YoY.

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Titan hits record high taking market cap above Rs 1 lakh crore

Jewellery-to-watch maker Titan Company shares gained a percent to hit a record high of Rs 1,160 in the morning trade on April 25, taking its market capitalisation to Rs 1 lakh crore.

In last one year, the stock has rallied 25 percent on good earnings growth and management outlook.

It was quoting at Rs 1,158.30, up Rs 10.75, or 0.94 percent on the BSE, at 0921 hours IST.

Market capitalisation stood at Rs 1,02,832.27 crore.

Earlier this month, Titan had said it expects to achieve 20 percent revenue growth despite muted industry demand growth in FY19.

This is on the back of 1) 20 percent sales growth in jewellery business led by higher number of wedding, 35 stores additions in FY19, increased share of wedding jewellery and high-value diamond jewellery and gains from consumer shift from unorganised to organised sector 2) steady growth in watch division led by new launches and success of smartwatches and 3) benefits from backward integration in the eyewear business.

Jewellery division grew 22 percent in FY19 led by strong same store growth and market share gains despite slow growth in the industry while watches business increased around 16 percent in FY19 led by new product launches across brands and growth in the e-commerce channel.

Brokerages remained positive on the stock after strong guidance for financial year 2019-20.

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Source: Moneycontrol

Titan stock jumps 5% as brokerages hike target price on strong Q3 earnings

Titan Company shares gained 5 percent to hit a 52-week high of Rs 1,044.30 on Monday morning as brokerage houses raised price target on the stock after the company reported strong earnings for December quarter.

The stock was quoting at Rs 1,031.90, up Rs 40.60 or 4.10 percent, amid high volumes on the BSE at 10:12 hours IST.

Global brokerage house Credit Suisse upgraded rating on the watches-to-jewellery maker to outperform from neutral and raised price target to Rs 1,175 from Rs 935 apiece after increase in its earnings estimates by 3-10 percent.

Higher gold prices have been aiding an already strong growth trajectory, said the research house which sees tailwinds from a strong wedding season.

CLSA also retained its outperform call on the stock and raised price target to Rs 1,100 from Rs 1,035 after revising EPS estimates by 2-6 percent as strong Q3 results drove earnings upgrade.

Exceptional performance in jewellery business was highlight of Q3 earnings and watches business faced margin headwinds on phasing out issue in A&P spends, the brokerage house said, adding the management is hopeful of a pick-up in jewellery sales in March.

Titan reported a healthy 43.5 percent on-year growth in third quarter consolidated profit to Rs 413.2 crore driven by revenue growth and strong jewellery business during festive season.

Revenue from operations during the quarter grew 34.6 percent year-on-year to Rs 5,871.5 crore with jewellery business growing 37 percent YoY.

The topline growth was driven by these new introductions, some successful activations as well as measured network expansion, the company said.

The income from watches increased 18.8 percent to Rs 641 crore and the eyewear business too grew a healthy 39.7 percent in Q3 to Rs 129 crore.

At operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) grew 31.4 percent YoY to Rs 584.2 crore in Q3, but margin contracted to 10.3 percent against 10.5 percent YoY.

Adjusted EBITDA stood at Rs 654 crore for the quarter. During the quarter, there was an additional provision of Rs 70 crore made for investments as part of treasury operations in inter corporate deposits in the IL&FS group.

Jefferies has maintained its hold rating on Titan but raised target price to Rs 1,100 from Rs 920 after increase in earnings estimates by 6 percent for FY19-21.

"The company continued to execute strongly & gaining share in jewellery business. 48x FY20e PE fairly captured superior execution & strong brand franchise," the brokerage said.

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Source: Moneycontrol