Emkay's research report on Titan Company
RBI withdraws 20-80 rule and restrictions on import of gold in its circular dated 28th November 2014.
Gold supplies would improve further; premium on gold would be back to normal at $3-4/ounce vs earlier level of $10-15/ounce and illegal gold sourcing would also come down. Expect 30-40bps EBITDA margin improvement & 4% change in FY16-17E earnings
No change in cost of funding by restoring to gold on lease in full, but reduced debt and gold-on-lease under current liabilities would mean better balance sheet & return ratios.
Import duty cut would improve competitiveness of organised jewelers and lead market share gains. On business, expect retail expansion to drive 20% revenue growth & mix improvement to lead margin expansion. Retain BUY with price target of Rs 450/share.
"With withdrawal of 20-80 rule, we don’t see the need to keep gold import duty (increased from 2% to 10%). Any cut in import duty would improve the competitiveness of organized jewelers and foster market share gains. Expect 20% revenue growth led by retail expansion & margin expansion led by better mix. We retain BUY rating with price target of Rs 450/share", says Emkay Global Financial Services research.
For all recommendations, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
