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Last Updated : Oct 28, 2020 09:41 AM IST | Source: Moneycontrol.com

Titan's Q2 may show sequential growth, topline likely to see a sharp decline YoY

Along with the numbers, commentary on the resumption of business recovery, cost management and demand outlook will be the key monitorables.


Titan Company will report its September quarter earnings on October 28, wherein the specialty retail firm is expected to show sequential improvement in revenue and EBITDA margin but a sharp decline in the top line.

Along with the numbers, commentary on the resumption of business recovery, cost management and demand outlook will be the key monitorables.

According to Kotak Institutional Equities, Titan's net sales may show a 96.8 percent quarter-on-quarter (QoQ) growth. However, it will be still 17.4 percent down year-on-year (YoY).

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The company's adjusted PAT may see a decline of 63.2 percent YoY. EBITDA margin may grow 1,995 bps QoQ but it may be still down 483 bps YoY, Kotak said.

"Given the discretionary nature of most of Titan's categories and a sharp jump in gold prices, we expect muted topline," Kotak said.

"We estimate (1) 12 percent YoY decline in jewellery segment revenues led by about 37 percent YoY decline in volumes and 40 percent increase in realisations (gold price+mix), (2) 40 percent YoY decline in the

watches segment revenues, and (3) 25 percent decline in the eyewear segment," Kotak added.

It expects Titan to report EBITDA of Rs 250 crore after factoring in some overhead cost control and low A&P spends. The brokerage expects an 8 percent EBIT margin for the jewellery business and EBIT losses for all other segments.

Brokerage firm Motilal Oswal Financial Services expects a sharp decline in Titan's Q2FY21 topline as the pace of recovery is still slow.

Titan's net sales may see a fall of 24.5 percent YoY while adjusted PAT may see a drop of 58.2 percent YoY, Motilal Oswal said.

Brokerage Emkay Global expects Titan's jewellery, watches and eyewear to decline 2 percent, 45 percent and 42 percent, respectively, YoY as indicated by the management.

"After including the raw gold sales of Rs 390 crore, we expect overall revenues to decline by about 4 percent YoY. Gross margins shall remain under pressure due to relatively lower studded mix, raw gold sales and higher discounting," Emkay said.

Emkay, too, expects a sequential improvement in Titan's Q2 numbers.

The estimates of Emkay show Titan's net sales may rise 129.8 percent QoQ and EBITDA margin may jump 2,294 bps QoQ.

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First Published on Oct 28, 2020 09:36 am
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