Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the retail sector. The brokerage house expects Titan Industries to report a 4.4 percent rise quarter-on-quarter (up 5.7 percent Y-o-Y) in net profit at Rs 190.5 crore.
Sales of Titan Industries are expected to decrease by 15.8 percent Q-o-Q (up 15 percent Y-o-Y) to Rs 2,617.4 crore, according to Motilal Oswal.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 9 percent Q-o-Q (up 7 percent Y-o-Y) to Rs 267 crore.
Motilal Oswal's Report on Titan Industries:
The broking firm expect Titan Industries to post sales of INR 26.2 billion, up 15 percent Y-o-Y.
Titan's jewelry business is facing multiple challenges: (a) demand slowdown due to pressure on discretionary consumption, (b) supply
shortage due to 20:80 scheme, and (c) withdrawal of gold-on-lease scheme.
After strong 67 percent volume growth in jewelry in 1Q, we expect Jewelry volumes to grow in single digits. However, Titan has been pushing diamond jewelry, which should result in higher share of studded jewelry.
The firm estimate margin decline of 50bp Y-o-Y, led by promotional offer on diamond jewelry and continued impact of INR depreciation on watch
margins. PAT should grow 9 percent to INR 1.96 billion.
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