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Dolat Capital Report
Titan Company Ltd.'s Q3 FY23 revenue performance was in line with estimate, however, profitability was below our estimate. Lower than anticipated margins in the jewellery business resulted in below estimated profitability.
The benefits of low cost inventory and customs duty fade out during the quarter which resulted in sharp drop in margins.
Going ahead, Titan expects 12-13% steady state margins in the jewellery business. Jewellery business witnessed positives –
golden harvest scheme posted double digit growth,
high cost jewellery contribution increased,
steady contribution of studded jewellery and
first Tanishq store launch in USA taking total international business store count at six.
We have marginally downward revised our FY23E/FY24E earnings per share estimates by 3/1% to Rs 38.0/42.5 to factor in Q3 performance.
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