Buy Titan Company Ltd For Target Rs.5,635 By Geojit Financial Services Ltd
Titan Co Ltd (Titan) operates across jewellery, watches, eyecare, fragrances, fashion accessories and engineering solutions, with jewellery remaining the dominant revenue contributor.
* Consolidated revenue grew 29.3% YoY to Rs.21,356cr in Q1FY27, driven by strong jewellery demand, retail expansion, premiumization trends, and higher buyer engagement across key brands.
* The jewellery segment’s revenue rose 42.6% YoY to Rs.18,253cr, propelled by festive/wedding demand, stable gold prices, buyer and ticket size growth, and attractive exchange-led proposition.
* Consolidated EBITDA surged 57.9% YoY to Rs.2,890cr and margin expanded 240bps YoY to 13.5%. The growth was driven by strong revenue, favorable product mix, and inventory revaluation.
* Reported profit after tax increased 62.9% YoY to Rs.1,777cr, supported by strong operating performance and customs-duty related gains.
Outlook & Valuation
Titan remains one of the strongest consumption franchises in India, with superior earnings growth prospects driven by sustained market share gains, premiumisation and operating leverage. Near-term risks include elevated gold prices, which may weigh on jewellery demand, and geopolitical uncertainty in the Middle East impacting Damas through weaker footfalls and consumer spending. However, we view the latter as a cyclical rather than structural challenge, with the broader international portfolio remaining profitable. Despite trading at a premium to peers, we believe the valuation is justified by Titan's strong execution, earnings compounding ability and industry-leading return ratios. We therefore upgrade the stock to BUY with a revised target price of Rs.5,635, based on 63x FY28E EPS.
Key concall highlights
* The watch segment’s revenue grew by 21.2% YoY to Rs. 1,543cr, led by premiumization in analog watches, and robust performance of key brands.
* Eyecare business revenue rose by 21.4% YoY to Rs. 289cr, fueled by premiumization, strong performance across both owned and international brands, targeted marketing campaigns, product innovation, store expansion, and a robust omnichannel strategy.
* Emerging business revenue increased by 18.2% YoY to Rs. 128cr, primarily driven by strong performance in women’s bags and fragrances as well as increased e-commerce penetration. Taneira maintained stable demand, contributing to the overall positive momentum.
* TEAL business grew by 42.8% YoY to Rs. 438cr, propelled by strong execution in automation and manufacturing services, increased contribution from service and retrofitting projects, seasonality-driven demand, and ongoing expansion and innovation for marquee clients.
*The company added 77 new stores (76 in Domestic business and 1 in International business), taking the total store count to 3,680.
For More Geojit Financial Services Ltd Disclaimer https://www.geojit.com/disclaimer
SEBI Registration Number: INH200000345
