Titan Q1 Results Review - Multiple External Factors, Volatile Gold Prices Checks The Quarter: Centrum

Centrum Broking Report

Titan Company Ltd.’s Q1 FY25 print was in with our estimates; multiple external factors and volatility in gold prices check consol. Revenue/Ebitda growth at 11.5%/10.8%, yet profit after tax declined by 5.4%. Jewelry division (excluding bullion sales) reported strong growth of 10.4% led by buyer growth of ~2%, though average spends per buyer grew by ~6% YoY.

Management alluded this to-

1. 45% contribution from new buyer,

2. 20% YoY retail growth during the first six weeks of the quarter that included Akshaya Tritiya, and

3. with 17 international stores and Rs 2.6 billion revenue grew 90%.

Despite better performance in south (+16% LFT), jewelry segment Ebit margin declined to 9.3% (-22 bp). Watches & Wearables segment grew 12.0%, with 10.9% Ebit margin. Eyewear business grew 3.4%, with 9.0% Ebit margin.

Emerging businesses grew 5.3% led by fragrances and fashion accessories/SKINN +46%/10.0%, while Caratlane saw solid growth of 17.9%.

Gross margin lowered to 22.1% (-12bp); Ebitda at Rs 12.5 billion improved by 10.8% settling Ebitda margin at 9.4% (-6bp) YoY.

Titan management remain optimistic and committed to invest in growth initiativesto gain market share, yet maintaining operating margin ~12-13% range. We retain Buy rating, with a DCF-based target price Rs 4,337 (implying 58.0 times average FY26E EPS).

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