Titan Firm Score: Maintain – Sturdy efficiency in Q4FY21


Nevertheless, this was offset by decrease prices. Workers, promoting & different bills noticed average y-o-y change. Web earnings have been up 48% y-o-y to Rs 5.3 bn, marginally forward.

Titan reported 30-50% y-o-y progress in Ebitda & earnings with 2Y CAGR additionally robust at 20-25%. Jewelry enterprise led income & revenue progress and managed to achieve share whereas different companies have been blended. Collection of initiatives are underway to navigate by the disaster however pandemic clouds near-term outlook, evident from the truth that simply half of Titan’s jewelry shops are presently operational. Forecasting FY22 is especially robust and we anticipate risky development.

Slight beat: Titan’s This autumn Ebitda grew 32% y-o-y to Rs 8 bn – 4% forward of our forecast. GM declined 850bps y-o-y because of inferior combine (inter/intra classes). Nevertheless, this was offset by decrease prices. Workers, promoting & different bills noticed average y-o-y change. Web earnings have been up 48% y-o-y to Rs 5.3 bn, marginally forward.

Good jewelry: Reported jewelry revenues grew 70% y-o-y– the robust progress was led by a low base in March, underlying 32% retail progress in Jan/Feb and 10% progress contribution from a B2B order. Correction in gold costs additionally helped as grammage grew 45% y-o-y.

Jewelry margin: Reported Jewelry Ebit margins at 10.9% was beneath our forecast (-3.3ppt y-o-y). Whereas not precisely quantified, the decrease margins have been due to some elements together with decrease studded combine (30% cf. 37% LY), loss from obligation minimize on gold imports, larger coin gross sales & low margins B2B order. In consequence, phase Ebit grew 32% y-o-y.

Different segments: Watch revenues remained flat y-o-y – the primary two months witnessed c.10% y-o-y decline however a low base in March helped. Margins dropped 4.7ppt y-o-y – this was partially because of a excessive base of final yr together with combine deterioration. E-commerce channel continues to see a rise in salience whereas metro & mall shops have seen higher restoration in This autumn. Eyewear revenues grew 18% y-o-y and higher product combine, decrease reductions and price management led to an all-time excessive Ebit margin of 18% and Rs 230 m in Ebit.

Key administration feedback: Heightened give attention to B/S – tight working capital administration; jewelry enterprise bought gold obtained by alternate within the bullion market; larger salience of gold-on-lease and many others. Decrease gold costs benefited the trade demand though Titan gained share; aggressive exercise has gone up from nationwide gamers, who’ve gained share from smaller gamers.

Incomes downgrade: We minimize our FY22-23 earnings estimates by 5-8% to issue within the affect of the second Covid-19 wave and resultant lockdowns and retailer closures. Revise down PT to Rs 1,450 (60x FY23e); retain Maintain.

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