Buy Titan Company Ltd For Target Rs.5,161 by Prabhudas Liladhar Capital Ltd
We attended the analyst meet of Titan, where management reiterated its confidence in delivering strong long-term growth across Jewellery, Watches, Eyewear, TEAL and emerging businesses. Overall TTAN is looking at doubling of sales on a consolidated basis with large ones like Domestic Jewellery, Watches, Eyewear and TEAL growing by 90%, 120%, 150% and 110% over next 4 years. IBD will gain from effective absorption of DAMAS and restaging of middle east business. While near-term demand may show some volatility due to elevated gold prices, geopolitical uncertainties and the impact of Adhik Maas, TTAN expects conditions to improve in the coming quarters, with no meaningful supply-chain disruptions anticipated.
We believe Titan remains well positioned to achieve its FY30 aspirations across key businesses, led by
1) Sustained premiumization
2) Product innovation
3) A consumercentric operating strategy
4) Resilience provided by strong balance sheet. We expect standalone EPS to grow at a CAGR of ~25% over FY26–28, driven by healthy growth across Jewellery, Watches and emerging businesses. Valuing Caratlane and TEAL at Rs.225/share and Rs.154/share, respectively, we arrive at SOTP-based target price of Rs5161 (unchanged). Retain BUY.
* In Jewellery, the focus remains on market share gains of ~350bps by FY30 to 11% with healthy 18.9% revenue CAGR through premiumization, innovation, regionalization and network expansion, supported by industry formalization. Smaller brands like Carat Lane, Mia and Zoya are expected to grow faster given niche consumer cohorts, margins are unlikely to show any recovery and should be range bound due to a higher contribution from lightweight jewellery and elevated competition.
* Watches & Wearables sees significant growth opportunities across premium, luxury and value segments. Growth will be supported by category premiumization, capacity expansion at Hosur2.0 and a renewed focus on the Rs.3,000–15,000 smartwatch segment.
* EyeCare is expected to benefit from rising formalisation and low category penetration, while International Business continues to gain traction through Tanishq's expansion among the Indian diaspora. TEAL remains a key long-term growth driver, supported by increasing opportunities in aerospace, semiconductor and precision engineering.
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