Titan, Info Edge, Happiest Minds, J Kumar, V-Mart, Symphony, Birla Corp. And More Q3 Review — HDFC Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

HDFC Securities Institutional Equities

Titan - Jewellery margins surprise positively

Consolidated jewellery sales (ex-bullion) grew 27.3% YoY to Rs 159.9 billion (inline) powered by gold prices growth (up 25% YoY). Domestic jewellery (exbullion) grew 25.4% YoY. Secondary UCP/LTL growth remained healthy at 28/22% respectively underpinned by a strong festive and wedding season (consolidated topline growth stood at 25.2% YoY at Rs 177.4 billion; in-line). Adjusted Jewellery margins (excl. Rs 2.53 bilion impact due to the Jul-24 customs-duty cut) surprised positively at 11.2%.

Note: Jewellery Ebitm (consolidated) contracted 240bps YoY to 9.2% versus our estimate’s 8.5%. Non-jewellery performance was largely in line; albeit margins were lower than expected. We largely maintain our FY26/27 EPS estimates and our Reduce rating with a DCF-based target price of Rs 3,160/share (implying 50x FY27 P/E).

Happiest Minds Technologies - Growth engine set to revive

Happies Minds Technologies Ltd. posted a weak quarter, with both revenue and margins coming in lower than our expectations. The 0.8% QoQ CC revenue growth in Q3 was impacted by seasonality and weakness in the ed-tech and travel verticals.

Management has lowered its growth outlook for FY25E, expecting growth at the lower end of the guided range of 30-35%, primarily due to delays in the integration of PureSoftware and Aureus, as well as slowdown in organic growth.

The growth engine is expected to revive, boosted by healthy growth in the BFSI vertical (supported by the Arttha platform), easing discretionary spending in Retail & CPG, strong demand for GenAI business across verticals, and collaborations with Microsoft and AWS to enhance the newly formed GenAI business unit (GBS).

Despite near-term softness, we remain optimistic about the company's long-term prospects, driven by its scalable business model, strategic partnerships, and emerging opportunities in GenAI. However, we have reduced our earnings estimates by ~5-6% due to softness in the Edutech and TME verticals.

The valuation premium is supported by the company’s ability to deliver double-digit organic growth and its size advantage. We maintain Add on Happiest Minds with a lowered target price of Rs 750, valued at 32x Mar27E earnings per share, supported by a 14% EPS CAGR over FY24-27E.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.