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Titan Company Q4 Preview: Profit may double, revenue may see upto 63% growth in jewellery business

Key things to watch out for would be the commentary on operational stores and hours as well as demand scenario due to lockdowns.

April 29, 2021 / 08:32 AM IST
 
 
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Jewellery-watch-to-eyewear maker Titan Company on April 29 is expected to report a strong 100 percent year-on-year (YoY) growth in profit and 63 percent growth in revenue for the quarter ended March 2021 backed by jewellery business, and the low base in the year-ago quarter.

According to brokerages, the jewellery business is likely to see more than 40 percent YoY growth on the back of wedding demand and correction in gold prices, while the eyewear segment could see over 20 percent growth YoY in Q4 FY21.

"We expect a 45 percent volume growth in jewellery on back of correction in gold prices, high demand of wedding jewellery and market share gains," said Prabhudas Lilladher which sees a 100 percent YoY growth in profit and 63 per cent in profit for Q4.

"We model 41 percent YoY growth in jewellery segment revenues on a low base. Our growth forecast implies about 19 percent YoY growth in volumes (LFL) and 18 percent increase in realizations (gold price+mix), 6 percent YoY growth in the watches segment revenues, and 23 perccent growth in the eyewear segment on weak base.

At the operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) could grow around 60 percent YoY in Q4 FY21, but margin may contract on the back of custom duty reduction on gold.

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"While margins will taper off by 340 bps due to lower studded ratio and higher procurement costs pre-increase in custom duty," said Prabhudas Lilladher which sees 59 per cent growth in Q4 EBITDA.

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Kotak expects a 135 bps YoY decline in EBITDA margin to 12.3 percent. On the segmental front, the brokerage expects an EBIT margin of 12.1 percent for jewellery business partly impacted by one-time loss pertaining to reduction of custom duty, 11 percent EBIT margin for watches segment, and 14 percent EBIT margin for eyewear segment.

Key things to watch out for would be the commentary on operational stores and hours as well as demand scenario due to lockdowns.
Moneycontrol News
first published: Apr 29, 2021 08:32 am

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