Company Update : Titan Ltd by Motilal Oswal Financial Services Ltd
Festive and Caratlane positive; contraction in standalone jewelry EBIT margin
* TTAN’s consolidated revenue grew 29% YoY to INR187.3b (est. INR163.6b). The beat was largely driven by high bullion revenue.
* Gross margin contracted 130bp YoY to 21.4% (est. 23%).
* EBITDA margin contracted 50bp YoY to 10% (est. 11.2%).
* Ad spends increased by 25% YoY, other expenses rose 20% YoY and employee costs were up 19% YoY.
* EBITDA grew by 23% YoY to INR18.8b (INR18.3b).
* PBT was up 23% YoY at INR15.2b (est. INR15.4b).
* Adj. PAT grew 20% YoY to INR11.2b (est. INR11.5b).
* In 1HFY26, nest sales, EBITDA and APAT grew by 27%, 34% and 34%, respectively.
Segmental performance
Jewelry Segment:
* Standalone sales (ex-bullion) grew 19% to INR127.9b (est. INR122.7b). Bullion sales jumped 122% YoY to INR19.6b.
* The domestic business witnessed a strong recovery in consumer momentum during the Navratri festive period.
* Tanishq’s attractive gold exchange offer helped to sustain sales despite elevated gold prices.
* The Tanishq, Mia & Zoya portfolio delivered ~18% YoY growth. Within the mix, gold jewelry grew 13% YoY and coins grew 65% YoY.
* Studded jewelry grew 16% YoY. Studded ratio stood at 34% of domestic jewelry (incl. Caratlane).
* Caratlane revenue surged 29% (beat) and EBIT margin expanded by 320bp to 10.2%.
* Standalone EBIT (ex-bullion) rose 13% YoY to INR13.8b and EBIT margin contracted 60bp YoY to 10.8% (est. 11.6%, 1QFY26 at 11.5%).
* EBIT margin impacted by a skewed product mix due to (a) higher gold coin sales, (b) reduced studded margins on account of high gold price, and (c) investments in exchange offers and campaigns to drive growth.
* Consolidated jewelry sales grew 29% YoY to INR165.2b (est. INR142.7b) (ex-bullion sales grew 22% to INR143.3b).
* Consolidated EBIT margin contracted 80bp YoY to 9.1% (est. 10.4%).
* Growth was primarily driven by higher average ticket sizes, while the number of buyers saw a marginal decline YoY.
Watches :
* Watch sales grew 13% YoY to INR14.8b (est. INR15.6b).
* EBIT margin was up 110bp YoY at 16.1% (est. 16%).
Eye Care :
* Eye Care sales grew 9% YoY to INR2.2b (est. INR2.3b).
* EBIT margin was down 540bp YoY at 5.5% (est. 11%).
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SEBI Registration number is INH000000412
