Titan 2QFY24 – Jewellery margins beat boost profits; Accumulate

Titan 2QFY24 – Jewellery margins beat boost profits; Accumulate - Amnish Aggarwal - Head of Research, Prabhudas Lilladher Pvt Ltd.

(CMP: Rs3275|Accumulate)

Financial Performance

> Revenues (ex of Bullion) grew by 20% YoY to Rs99.48bn (PLe: Rs103.8bn); with Jewellery/ Watches/ Eyewear growing by 19%/ 31.7%/ 12.6%

> Gross margins contracted by 416bps YoY to 22.4%.

> EBITDA grew by 9.8% YoY to Rs13.6bn, Margins contracted by 251bps YoY to 11.6% (PLe:12.3%)

> Adj. PAT grew by 9.7% YoY to Rs9.4bn (PLe: Rs8.6bn)

Segment wise Performance

> Watches revenues grew by 31.7% YoY to Rs10.9bn; EBIT grew by 30.1% YoY to Rs1.6bn; margins contracted by 19bps YoY to 14.7%.

> Jewellery revenues grew by 34.4% YoY to Rs103.3bn; EBIT grew by 9.3% YoY to Rs12.1bn; margins contracted by 268bps YoY to 11.7%. Margins excluding bullion sales declined 120bps to 14.1%

> Eyewear revenues grew by 12.6% YoY to Rs1.9bn; EBIT declined by 0% YoY to Rs280mn; margins contracted by 187bps YoY to 14.9%.

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TTAN’s 2Q standalone revenue growth of 20% YoY was broad based across all segments. Studded activation and double digit growth in number of buyers and average bill value aided jewelry growth while wearable sales grew by 131%. We expect growth momentum to accelerate in 2H given festival and marriage season. Retain Accumulate.

Stock trades at 64.5x FY25 EPS