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Motilal Oswal Report
Titan Company Ltd.'s Q1 FY24 revenue grew 26% YoY, ahead of our expectation, with double-digit growth across all segments. However, due to lower-than-expected margins, Ebitda and adjusted profit after tax missed our estimates.
Margins were adversely affected by seasonality, volatility in gold prices and a one-time diamond price inventory gain in Q1 FY23.
Four-/five-year Jewelry Ebit compound annual growth rate was robust at ~24%/22% in Q1 FY24. Management indicated that Jewelry margin guidance of 12-13% in FY24 remains unchanged and Q1 is normally weak on margin front due to more gold contribution.
Titan's brand-building initiatives across segments, increasing customer base, store expansions and development in international markets continued to be impressive.
We reiterate our 'Buy' rating with a target price of Rs 3,325 (premised on 60 times FY25E earnings per share).
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