Prabhudas Lilladher's research report on Titan Company
We are increasing FY22/23/24 EPS by 7.3%/0.1%/1.1% given 1) strong demand recovery across verticals 2) operating leverage led margin expansion in Jewellery 3) All time high margins in Eyewear led by business model restructuring and benefits of backward integration of past few years. We believe that 1) Strong wedding jewellery demand, improved mix and benefits of hallmarking in Jewellery 2) aggressive store expansion of 250-300 in eyewear and 3) acceleration in store openings in watches and 4) scale up in emerging businesses like Taneira and wearables will be major growth drivers for TTAN going forward. We continue to remain positive on the long term structural story on account of market share gains, strong balance sheet, franchisee based model and strong brand.
We expect Eyewear and watches to lead margin recovery on a low base and rising scale and mix improvement. Maintain BUY with DCF based TP of Rs 2651 (Rs 2554 earlier). However, we expect back ended returns given 17% and 42% returns in past1/3 months.
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