Buy Titan Company Ltd For Target Rs. 3,795 - Motilal Oswal Financial Services Ltd
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Healthy double-digit growth across businesses
TITAN released its pre-quarterly update for 2QFY24. Here are the key highlights:
* TITAN is expected to record double-digit growth across its key businesses.
* Its standalone revenue is expected to grow by 20% YoY, driven by doubledigit growth in the number of buyers and ticket sizes.
* The company added 81 stores during the quarter.
* It is making healthy progress in retail store expansion, with the total retail footprint (including CaratLane) increasing to 2,859 stores at the end of 2QFY24.
Jewelry division
* It grew ~19% YoY (excluding bullion sales) during the quarter. The segment posted a 3-year/4-year revenue CAGR of 27%/21%.
* Growth is driven by studded activations, new collection launches, robust Golden harvest sales, a healthy wedding season and high-value studded purchases.
* Domestic consumer sales (secondary) saw 20% YoY growth, led by doubledigit growth in the number of buyers and average ticket sizes.
* Its primary outgo from India to international entities has been lowered due to periodic inventory realignment.
* Tanishq expanded its GCC presence by entering Qatar and adding 2 new boutiques in Doha.
* Domestic new store additions stood at 37: 10 stores of Tanishq, 26 stores of Mia by Tanishq and 1 store of Zoya
Watches & Wearables division
* It grew ~32% YoY, with ~22% growth in analog watches and ~131% YoY growth in wearables.
* Growth in analog watches was driven by healthy sales in the mid-to-premium watches segment.
* Titan brand and international brands delivered healthy double-digit growth.
* In E-commerce, sales growth more than doubled as partners stocked up in anticipation of strong Q3 festive season sales.
* Wearables category grew 2.5x YoY, with the segment’s share increasing to the mid-teens in the W&W portfolio.
* Store additions: 20 new stores (10 of Titan World, 5 of Helios and 5 of Fastrack).
Eyecare division
* It is expected to see revenue growth of ~12% YoY.
* International brands grew faster than House brands.
* It added 4 new stores of Titan Eye+ and 1 new store of Fastrack in the domestic market during the quarter.
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SEBI Registration number is INH000000412
