Company Update : Titan Company Ltd By JM Financial Services
Jewellery business growth disappoints
* Jewelry: Segment domestic revenue grew ~18% YoY; however Tanishq Mia and Zoya registered 17% growth (ex- bullion), led by gold prices volatility impacting the consumer growth. This is lower vs our initial estimates of ~22% jewellery growth. Akshaya Tritiya period saw good traction, while the increase in gold prices from May till mid-June saw some softening in consumer purchases. Buyer growth was flat YoY for all jewellery businesses. Customers preferred light weight and lower karatage jewellery. Coins continue to lead the growth strongly with plain gold growing in mid-teens and studded segment registering early double digit growth resulting in ~100bps lower YoY studded share to 25%. LTL domestic sales growth in Tanishq, Mia and Zoya was in early double digit driven entirely by ticket size growth across formats. Company added 3/7 Tanishq/ Mia stores in Q1.
* Watches and wearables: Segment revenue grew ~23% YoY led by analog driven by both volume and value growth. Sonata with its refreshed offerings led the growth for Q1, followed by Titan and other brands, all clocking healthy double digit growth. Division added 4/5 stores of Titan World/ Helios.
* Eyecare: The segment grew 12% YoY led by performance across retail and e-commerce, by both international and in house brands. It closed 20 (net) store in stores in India in Q1.
* Caratlane: Revenue grew ~38% YoY. L2L stood in healthy double digits. The buyer growth stood flat YoY. It added 9 stores, taking the EOP store count to 331.
* Emerging businesses and others: Fragrances/Fashion accessories grew ~56%/61% YoY. Taneira sales grew ~15% YoY led by value growth in sarees.
* International business grew 49% YoY led by doubling of Tanishq's business in US market. It added 1 store of Tanishq in Dubai and 1 Titan Eye+ store in Sharjah and closed 1 mia store in the region.
* Overall standalone performance: Overall standalone revenue are expected to grow ~18% YoY led by 18% YoY growth in jewelry business (ex-bullion). We expect jewelry EBIT margin of 11% (ex-bullion sales; ~20 bps down YoY). Overall, we estimate standalone EBITDA/ PAT growth of 20/ 19% YoY.
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SEBI Registration Number is INM00001036
