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Prabhudas Lilladher Report
We conducted channel check of eyecare players to evaluate key success factors such as price, in-store experience, after-sales support and store presence.
We conclude that Titan Eye Plus clearly stands out with high customer ratings (4.9/5.0) and superior customer value. We believe that Titan Eye Plus has huge scope of growth, as only 33% of people in need of eyecare (600 million) are using specs as of now.
Titan Company Ltd. has cracked the eyecare model with a five pronged strategy which includes-
retail expansion (1000 stores by FY24),
in-house manufacturing of both frames and lenses,
superior customer experience,
product innovation (Titan EyeX, Titan Ultima and Clear SightZ) and
cutting edge communication.
We expect eyecare business to achieve sales of Rs 10.5 with Ebitda of Rs 2.4 billion by FY25. Based on Lenskart valuation of $4.5 billion, Titan Eye+ could be worth Rs 126/share (Rs 120 billion) in valuation.
While we remain confident of steady growth in jewelry and watches, we believe emerging businesses of Titan Eye+, wearables, Caratlane and Taneira will provide an icing on the cake.
Titan Company currently trades at 58.0 times FY25E earnings per share with 19.9% EPS CAGR over FY23-25.
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