Titan Q4 Results Review - Challenging Times Ahead; Sell: Dolat Capital

Dolat Capital Report

Titan Company Ltd.’s Q4 FY24 Ebitda was in-line with our estimate, however, revenue and adjusted profit after tax came ahead of our anticipation. The studded contribution remained steady at 33%. A 170 bps drop in gross margin was a negative surprise during the quarter.

Despite recent surge in gold prices, the company would continue to focus on accelerating volumes. However, taking cues from anecdotal evidences, we expect volumes to remain under pressure.

Further, margins are also likely to remain under pressure due to increased discounting and competition.

We have reduced our FY25/26E earnings per share estimate by 2.7/1.3% at Rs 51.5/61.5 to factor in increased gold prices and its impact on volumes, and higher discounting to addressed escalated competition.

We downgrade the stock to ‘Sell’ from Reduce valuing at 54 times FY26E earnings per share and arrive at a target price of Rs 3,322.

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