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Titan Industries Limited
Neutral; TITN.BO, TTAN IN
Q3FY11 : All round strong performance
Strong Q3. Titan reported yet another strong quarter with Sales,
EBITDA and PAT growth of 47%, 82% and 80% respectively during
Q3FY11, exceeding our and street estimates by a wide margin. Sales and
margin performance for both jewelry and watch segment was healthy.
Management noted that consumer sentiment has been buoyant and
discretionary spending has been robust in the festive season (Q3),
supported by rising income and aspirational levels. Titan maintained its
retail expansion momentum adding 32 new stores (over c30,000 sq ft ).
• Jewelry revenues rose 50% y/y aided by faster growth for diamond
jewelry (c30% share) and gold volume (grammage) growth of c15%.
Gold prices increased 19% y/y during Q3FY11. Strong SSS growth and
better product mix improved overall jewelry margins by 200bp y/y.
• Watch revenue growth of 35% y/y aided by 25%+ volume growth and
broad based growth across all three key brands – Titan, Fastrack and
Sonata. EBIT margins for this segment expanded sharply by 330bp y/y
supported by healthy volume & SSS growth and better product mix.
• Eyewear Retailing continues to witness aggressive retail expansion
which contributed to overall EBIT losses of cRs25mn during Q3FY11.
Precision Engineering had a challenging quarter posting nearly similar
losses as eyewear retailing during the quarter.
• Earnings revision. We raise our EPS estimates for FY11E and FY12E
by 14% and 10% respectively to factor in higher sales growth and
margins for jewelry and watch business. We estimate sales and earnings
CAGR of 23% and 26% respectively over FY11-13E supported by a)
strong discretionary spending trends, b) management’s clear focus on
profitability enhancement via product mix improvement and lower losses
for eyewear retailing, and c) growing distribution and expanding price
points across product categories. Our Sep'11 TP is now revised to
Rs3,800.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Titan Industries Limited
Neutral; TITN.BO, TTAN IN
Q3FY11 : All round strong performance
Strong Q3. Titan reported yet another strong quarter with Sales,
EBITDA and PAT growth of 47%, 82% and 80% respectively during
Q3FY11, exceeding our and street estimates by a wide margin. Sales and
margin performance for both jewelry and watch segment was healthy.
Management noted that consumer sentiment has been buoyant and
discretionary spending has been robust in the festive season (Q3),
supported by rising income and aspirational levels. Titan maintained its
retail expansion momentum adding 32 new stores (over c30,000 sq ft ).
• Jewelry revenues rose 50% y/y aided by faster growth for diamond
jewelry (c30% share) and gold volume (grammage) growth of c15%.
Gold prices increased 19% y/y during Q3FY11. Strong SSS growth and
better product mix improved overall jewelry margins by 200bp y/y.
• Watch revenue growth of 35% y/y aided by 25%+ volume growth and
broad based growth across all three key brands – Titan, Fastrack and
Sonata. EBIT margins for this segment expanded sharply by 330bp y/y
supported by healthy volume & SSS growth and better product mix.
• Eyewear Retailing continues to witness aggressive retail expansion
which contributed to overall EBIT losses of cRs25mn during Q3FY11.
Precision Engineering had a challenging quarter posting nearly similar
losses as eyewear retailing during the quarter.
• Earnings revision. We raise our EPS estimates for FY11E and FY12E
by 14% and 10% respectively to factor in higher sales growth and
margins for jewelry and watch business. We estimate sales and earnings
CAGR of 23% and 26% respectively over FY11-13E supported by a)
strong discretionary spending trends, b) management’s clear focus on
profitability enhancement via product mix improvement and lower losses
for eyewear retailing, and c) growing distribution and expanding price
points across product categories. Our Sep'11 TP is now revised to
Rs3,800.
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