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Titan Company Quarterly results Financial Summary

Titan Company Quarterly results Financial Summary

Titan Company Ltd, one of India's most iconic lifestyle companies, was created in 1984 as a joint venture between TATA Group and Tamilnadu Industrial Development Corporation (TIDCO). Titan has expanded into underserved markets, established leadership positions, and bought transformation in the Watches, Jewellery, and Eyewear segments, due to its trusted brands and distinctive customer experience. Titan is thus the world's fifth largest integrated own-brand watch maker. Over the past several decades, they have built lifestyle brands in a variety of product segments.

KEY POINTS

Jewellery Division (89% of revenues)

Tanishq began its journey in 1994, disrupting India's established family jewellers system. It has grown over the years into one of the premier jewellery names, synonymous with beautiful craftsmanship and superior quality. Offering both traditional and modern classic pieces in gold, diamond, and platinum. Zoya was launched in the luxury market, whereas Mia was a sub-brand under Tanishq for work-wear jewellery. Titan made an investment in CaratLane in 2016 (Titan controls 72.3% of CaratLane, making it a majority-owned subsidiary). Titan has a 6% market share in India's jewellery market as of 2022. Manufacturing facilities are located in Hosur, Pantnagar, and Sikkim. The Jewellery division of the company has a significant retail presence with 580 retail locations. Tanishq opened 36 new stores in FY22, Zoya added one, CaratLane added 31 stores, and Mia by Tanishq added ten. Titan Co.'s jewellery business recorded a 35% increase in revenue to Rs. 23,268 cr ($3.04 bn) for the fiscal year FY 2021-22.

Quarterly Performance

Quarterly Results Rs Cr
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22
Sales + 7,493 10,037 7,796 9,443 9,163 11,609
Expenses + 6,525 8,595 7,002 8,247 7,916 10,262
Operating Profit 968 1,442 794 1,196 1,247 1,347
OPM % 13% 14% 10% 13% 14% 12%
Other Income + 55 57 22 44 61 90
Interest 51 57 61 65 60 79
Depreciation 104 98 102 103 106 113
Profit before tax 868 1,344 653 1,072 1,142 1,245
Tax % 26% 25% 19% 26% 27% 27%
Net Profit 641 1,012 527 790 835 913
EPS in Rs 7.2 11.31 5.74 8.84 9.36 10.18
PEER  COMPARISION
Name P/E Mar Cap (Rs.Cr) Div Yld % Qtr Profit Var % ROCE %
Titan Company 71.17 218195.66 0.31 -9.96 21.4
Rajesh Exports 24.67 26725.52 0.11 27.98 8.85
Kalyan Jewellers 29.41 12360.9 0 54.12 9.36
Vaibhav Global 43.79 4867.82 2.04 -44.81 20.88
PC Jeweller 1915.25 0 208.91 -0.94
Goldiam Intl. 17.95 1829.12 0.71 -4.43 29.48
Thangamayil Jew. 24.94 1413.93 0.97 21.75 11.48

Jewellery

With the Jewellery segment representing more than 80% of revenues. When compared to the previous year period, the company's total income climbed by almost 16% to Rs 11,698 crore. In contrast, revenue from the Jewellery category increased 11% to Rs 9,518 crore, owing to strong festival season demand. According to the filing, the company would invest in brands and digital capabilities while pursuing market share through a wide range of strategies. The EBIT was Rs. 1,236 Cr, representing a 13% EBIT margin. Tanishq launched its first boutique store in New Jersey, USA, in December 2022, bringing the total number of overseas stores to six. During the quarter, the business opened 22 new stores (excluding Caratlane), bringing the total number of Jewellery stores to 510 across 247 locations.

 Watches & Wearables

In comparison to the previous quarter, the company's Watches & Wearables division recorded a 15% increase in total income to Rs. 811 Cr. During the fiscal year, the company's steady growth trajectory was fuelled by a succession of new product debuts. The firm earned Rs. 89 crores in EBIT, with an EBIT margin of 11.0%. Several new products were introduced in the analog watches section, including the Edge Squircle, Titan Quartet, a new range of mechanical watches and the Raga Delight watch. 48 stores were added during the quarter, bringing the total number of section stores to 953.

 EyeCare

EyeCare's total revenue was Rs. 174 Cr, a 12% increase over the previous quarter. The company recorded an EBIT of Rs. 32 Cr, with a margin of 18.4%. Titan Eye Plus opened its first international outlet in Dubai in December 2022. The network expansion continued with 36 new outlets added, bringing the total number of locations to 863 throughout 354 cities.

 Emerging Businesses

Income from the Emerging Businesses, which include Fragrances and Fashion Accessories (F&FA) and Indian Dress Wear (Taneira), increased by 71% as compared to the previous period quarter. Within this, F&FA booked growth of 37%, while Taneira booked growth of 150% over the same period the previous year. Even after the growth, the emerging businesses segment registered a loss of Rs. 17 crores. The F&FA Business launched the 'IRTH' brand of women's bags during the quarter. Celebrations and weddings dominated the third quarter. Taneira's collection of handcrafted sarees and kurta sets added delight to customer celebrations. The brand's presence in India continues to expand rapidly, with 5 new stores opening during the quarter, bringing the overall store count to 36.

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     Caratlane Trading Private Limited

    Caratlane is a significant subsidiary of the Company. Total income increased by 51% to Rs. 677 Cr in the same period last quarter, driven by gifting promotions around the festive season. Profit before taxes (PBT) was Rs. 51 Cr, with a 7.5% margin. During the Indian festival season, to name a few Diwali and Dhanteras, the #MereStyleKiDiwali campaign focused on family gifts were introduced. In collaboration with Warner Bros., the Harry Potter line was launched as a jewellery gifting promotion for children.  The business expanded its presence by opening 18 new stores across Tier-2 and Tier-3 cities, pushing the total number of Caratlane store count to 175 spread across 67 cities.

    Titan Engineering & Automation Limited

    The segment's total income was Rs. 125 Cr, representing a 53% increase over the previous year's period. The segment lost Rs. 0.4 Cr at the conclusion of the quarter. During the quarter, the company received one of its highest-ever order inflows of Rs. 344 Cr.

    Titan has joined the "Tata Neu" platform, which incorporates some of the most popular Tata brands under one powerful super app. Members of Titan's loyalty programme will now be able to take advantage of the unique perks given by Tata Neu through its unified loyalty programme, NeuPass.

    Conclusion

    The quarter saw strong seasonal consumer demand, and the company generated a robust double-digit increase of 12% over a solid Q3 FY22. The company is on a continuous path of investing in capabilities across all business segments as they continue to chase market share expansion. The company’s worldwide venture is doing well, and they are pleased with the customer reaction being received in the targeted international markets. We recommend buying titan for the price target of 2700 in the near term.

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