IGI Logo

Double-digit growth in standalone businesses

Pre-quarterly update for 3QFY23 |The key highlights

* Titan (TTAN)’s standalone business sales grew 12% YoY aided by festive demand.

* It added 111 stores during the quarter.

* Positive consumer sentiment helped all categories clock healthy double-digit growth despite a high base.

Jewelry division

* Grew 11% YoY (excluding bullion sales) over a high base.

* The sales from studded category moderately outpaced gold jewelry (plain) segment growth.

* Tanishq opened its first international boutique store in New Jersey, US during the end of the quarter.

* The new store expansions (net) consisted of eight stores in Tanishq and 14 in Mia by Tanishq.

Watches and the Wearables division

* Grew 14% YoY aided by strong traction in wearables, whose sales tripled YoY.

* The analog watches segment saw multiple product launches (Edge Squircle, Titan Quartet and new range of mechanical watches for men as well as Raga Delight watches).

* The division had launched retail store transformation in mid of FY22. 81 stores have been renovated till now in YTD FY23.

* Store additions: 24 Titan World, 17 Helios and 7 Fastrack stores.

Eyecare division

* Sales from Titan Eye+ stores and Trade & Distribution channel saw in-line growth with the overall business.

* Store additions: 36 Titan Eye+ stores.

Other businesses (Fragrances and Fashion Accessories or F&FA and Indian Dress Wear)

* F&FA grew ~39% YoY driven by ~50% growth in Fragrances and ~21% growth in Fashion Accessories.

* Among offline channels, trade and LFS grew the fastest.

* It launched the ‘IRTH’ brand of women handbags during the quarter.

* Taneira grew ~150% YoY. It opened five new stores during the quarter.

Key subsidiaries Titan Engineering & Automation (TEAL) – a wholly-owned subsidiary

* Business grew 58% YoY with Automation Solutions Division increasing ~50% YoY and Manufacturing Services (previously known as Aerospace and Defence Division) clocking ~64% growth.

* CaratLane (72.3% owned) grew ~50% YoY driven by gifting campaigns around the festive season.

* Studded growth was moderately higher than overall growth and contributed ~75% of the business.

Valuation and view

Earnings growth visibility for TTAN remains strong. It has compounded earnings by ~20% for an extended period of time. In the Jewelry industry, which is organizing at a rapid space, it is clearly at the vanguard in terms of growth among organized players. Its runway for growth is long, with a market share of ~6%. Unlike other high-growth categories, the competitive intensity from organized and unorganized peers in Jewelry is considerably weaker. The structural investment case for TTAN is intact. We maintain our BUY rating with a TP of INR3,080.

To Read Complete Report & Disclaimer Click Here

For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html

SEBI Registration number is INH000000412

Above views are of the author and not of the website kindly read disclaimer