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Titan Q1 Result Preview | Standalone PAT likely to grow ~31% sequentially, revenue by 12%

The year-on-year growth is likely to be driven by robust growth across its three main business segments of jewellery, watches and eyewear, with experts expecting all three lines to more than double revenues from last year.

August 04, 2022 / 04:36 PM IST
 
 
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Titan Company Ltd is expected to report a sequential growth of 31 percent in its standalone profit after tax (PAT) for the first quarter when it declares its results on Friday, August 5. Revenue for the quarter is predicted to grow 12 percent quarter-on-quarter (q-o-q).


On a year-on-year (y-o-y) basis, growth in both PAT and revenue is likely to be more pronounced due to the COVID-impacted low base of last year. PAT is seen surging by 1,065 percent on year on a revenue growth of 150 percent y-o-y.


The Tata group company is likely to report a standalone PAT of Rs 711 crore on a standalone revenue of Rs 8,112 crore, according to an average of estimates by four brokerages polled by Moneycontrol.


The y-o-y growth is likely to be driven by robust growth across its three main business segments of jewellery, watches and eyewear, with experts expecting all three to more than double revenues from last year. Also, the Omicron wave in the fourth quarter of last financial year had the effect of demand being deferred to Q1FY23.


The company had recorded a standalone PAT of Rs 61 crore during the same period last year when it had earned standalone revenue of Rs 3,249 crore. The quarter was impacted by the second wave of COVID.

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During the quarter ended March, the company registered a standalone PAT of Rs 542 crore (excluding exceptional items of Rs 51 crore) on a revenue of Rs 7,276 crore.


The company added about 120 stores across its business segments and formats.


“Expected Segmental revenue growth: Jewelry 207 percent, Watches & Wearables 158 percent, Eyewear 176 percent, and Other Businesses 455 percent,” said a report from Centrum Institutional Research.


The brokerage is of the opinion that the deferred weddings from Q4FY22 translated into a threefold revenue growth in plain gold jewellery in the first quarter of this fiscal. “We believe underlying demand continued to be strong across all business segments,” it added.


Kotak Institutional Equities models a 150 percent y-o-y revenue growth in the jewellery segment on LFL (like for like) basis (excluding sale of gold ingots/bullion) off a weak base. It expects 130 percent y-o-y growth in watches (-2 percent three-year CAGR or compound annual growth rate) and 150 percent y-o-y growth in eyewear (4 percent three-year CAGR).


Enrolments to its jewellery brand Tanishq’s Golden Harvest scheme were encouraging, while the watches business saw smart recovery across formats, especially large stores, which saw good traffic.


Eyewear and e-com sales are seen gathering traction, supported by new launches in the lenses and frames segment.


“Caratlane (72.3 percent subsidiary) continued its growth trajectory, coupled with heightened consumer demand, backed by omni-channel initiatives reporting 207 percent growth y-o-y,” the Centrum report said.


Given the strong recovery in sales, EBITDA (earnings before interest, tax, depreciation and amortisation) margins are likely to witness handsome gains.


“We expect 795 bps (basis points) y-o-y expansion in EBITDA margin to 12.4 percent,” said a report from Kotak Institutional Equities. “On segmental front, we expect EBIT (earnings before interest and tax) margin of 12.5 percent for jewellery business, 10.5 percent EBIT margin for watches, and 15 percent for eyewear.”


The company closed Rs 7.25 higher at Rs 2,423.65 on August 4 on the National Stock Exchange. The stock has generated returns of 34 percent during the past one year and has gained 23.5 percent over the past one month.

Disclaimer: The views and investment tips of investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Gaurav Sharma
first published: Aug 4, 2022 04:35 pm
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