Titan Company
BSE SENSEX
27,698
S&P CNX
8,545
3 August 2016
1QFY17 Results Update | Sector: Retail
CMP: INR414
TP: INR360(-13%)
Neutral
Motilal Oswal values your support in
the Asiamoney Brokers Poll 2016 for
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request your ballot.
Demand outlook remains subdued
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
TTAN IN
887.8
367.9 / 5.5
435 / 303
0/1/32
507
47.0
Financials & Valuations (INR b)
Y/E Mar
2016 2017E 2018E
Net Sales
111.8 126.3 147.8
EBITDA
8.6
10.4
12.6
PAT
7.1
7.9
9.6
EPS (INR)
8.0
9.0
10.8
Gr. (%)
-13.4
11.4
21.0
BV/Sh (INR)
40.4
47.1
54.9
RoE (%)
21.3
20.4
21.2
RoCE (%)
21.8
20.7
21.2
P/E (x)
51.6
46.3
38.2
P/BV (x)
10.2
8.8
7.6
Estimate change
TP change
Rating change
Titan posted 1QFY17
sales growth of 3.6% YoY (est. of +15%) to INR28b (Ind-
AS), with the Jewellery segment posting a 3.2% YoY increase in revenues.
EBITDA grew 38% YoY (est. of +23%) to INR2.8b. Adj. PAT rose 47.5% YoY (est.
of +26.1%) to INR2.2b.
Jewellery segment sales grew 3.2% YoY
due to a depressed demand
environment, shorter wedding season this year, clampdown on black money
(which was earlier invested in jewellery) and absence of activation (unlike
1QFY16 when the company had advanced its sales season). With the sales
season kicking in, management expects better demand. Segment margins
increased 150bp YoY (adjusted for VRS) to 10.2%.
Watches segment posted sales growth of 1.5% YoY
to INR4.9b, mainly due to
export sales decline as domestic sales rose 11% YoY. However, activation in this
segment began early this year, which does not augur well for 2QFY17 growth.
Adjusting for VRS, EBIT margin expanded 430bp YoY to 14.3%. Management
stated that, while yearly margins are likely to be in double-digits, 1QFY17
watch margins adjusted for VRS are not sustainable.
EBITDA margin expanded 250bp YoY to 9.9%,
led by gross margins expansion
of 80bp YoY and a 110bp decrease in A&P, neither of which is sustainable.
Management mentioned that gross margins were inflated by the absence of
spot gold purchases and that A&P is unlikely to decline on a YoY basis in FY17.
Concall highlights:
(1) Gold jewellery sales have been impacted by (a) the price
of gold, (b) clampdown on spending of unaccounted money and (c) weak
consumer spending. (2) Nevertheless, for the jewellery segment, management
maintained its guidance of 15% sales growth for the full year and 9-10% EBIT
margin.
Valuation and view:
There are minor adjustments to our FY18E EPS as a result
of the results and management commentary. Even though we expect
respectable 16% earnings CAGR over FY16-18E (delivered 4% over FY12-16) on
a lower base and a healthy contribution of GHS, we see risks emanating from
the still subdued demand environment. Valuations at 38x FY18E appear rich.
Maintain
Neutral
with revised TP of INR360 (value at 32xJune 2018 EPS).
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Krishnan Sambamoorthy
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 3982 5428
Vishal Punmiya
(Vishal.Punmiya@MotilalOswal.com); +91 22 3980 4261

Titan Company
Key Quarterly Charts
Exhibit 1: Segmental Snapshot
INR m
Total Sales
Watches
YoY Growth
Jewelry
YoY Growth
Others
YoY Growth
Total EBIT
Watches
YoY Growth
EBIT Margin
Jewelry
YoY Growth
EBIT Margin
Others
1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17
31,085
3,987
10.5%
25,866
45.7%
1,232
37.4%
2,443
385
-23.7%
9.6%
2,030
12.5%
7.8%
28
23,545
4,424
-6.2%
17,981
4.3%
1,141
17.2%
2,871
464
-15.1%
10.5%
2,409
12.0%
13.4%
(3)
26,785
4,513
6.6%
21,107
-16.1%
1,165
18.6%
2,463
471
-7.9%
10.4%
2,009
-18.5%
9.5%
(18)
28,073
5,018
19.5%
21,573
3.1%
1,462
15.0%
2,927
602
32.0%
12.0%
2,294
-7.8%
10.6%
31
28,931
4,442
11.4%
23,253
-10.1%
1,236
0.3%
2,665
449
16.7%
10.1%
2,178
7.2%
9.4%
38
35,947
5,275
19.2%
29,294
62.9%
1,379
20.9%
3,356
666
43.4%
12.6%
2,682
11.3%
9.2%
8
29,237
4,426
-1.9%
23,474
11.2%
1,337
14.7%
2,691
428
-9.2%
9.7%
2,261
12.5%
9.6%
2
25,038
5,110
1.8%
18,279
-15.3%
1,649
12.8%
2,795
489
-18.8%
9.6%
2,321
1.2%
12.7%
(15)
26,050 26,753
4,852
-8.0%
5,465
3.6%
34,290
4,786
8.1%
28,193
20.1%
1,312
-1.9%
3,094
324
-24.3%
6.8%
2,892
27.9%
10.3%
(122)
24,632
4,440
-13.1%
18,444
0.9%
1,749
6.1%
2,167
45
-90.8%
1.0%
2,056
-11.4%
11.1%
67
26,940
4,917
1.5%
21,383
3.2%
639
-58.4%
2,047
92
-80.9%
1.9%
2,039
13.1%
9.5%
(83)
20,729 19,817
-29.2% -32.3%
469
-66.0%
2,311
474
-28.9%
9.8%
1,815
8.8%
22
1,471
6.7%
2,013
838
25.8%
15.3%
1,191
6.0%
(16)
-32.3% -55.6%
Source: Company, MOSL
Exhibit 2: Net space addition of 20k sqft. In 1QFY17 vs FY16
Space (in ‘000 sqft)
Format
World of Titan
Fastrack
Helios
Tanishq
Goldplus
Zoya
Eye+
Total
Space
412
92
53
820
81
7
155
1620
FY14
Stores
430
154
42
174
33
2
366
1201
Space
416
90
53
718
81
7
225
1590
FY15
Stores
427
157
43
177
33
2
384
1223
Space
423
94
48
808
81
7
259
1720
FY16
Stores
452
159
41
193
32
2
404
1283
Space
426
95
45
823
74
7
270
1740
1QFY17
Stores
458
160
41
197
30
2
405
1293
Source: Company, MOSL
Exhibit 3: Jewelry grammage grew 6% in 1QFY17..
67
Volume Growth (%)
75
Exhibit 4: ..while sales grew just 3%
Sales Growth (%)
63
46
12 9
(11)
(21)
25
(4)
(21)
(2)
(24)
(11)(10)(10)
28
15
27
6
8
6
16
4
(16)
3
11
(10)
(15)
(29)(32)
20
1
3
Source: Company, MOSL
Source: Company, MOSL
3 August 2016
2

Titan Company
Exhibit 5: Jewelry: Key operating parameters
Jewelry
Volume Gr (%)
Customer Gr (%)
Studded Share (%)
Sales Gr (%)
1Q14
67
49
16
47
2Q14
(4)
(3)
39
4
3Q14
(21)
(10)
26
(15)
4Q14
(2)
3
37
4
1Q15
(24)
(16)
25
(10)
2Q15
75
97
35
63
3Q15
25
8
26
11
4Q15
(11)
(7)
37
(15)
1Q16
(10)
NA
29
(11)
2Q16
(10)
NA
24
(32)
3Q16
28
NA
25
20
4Q16
15
NA
34
1
1Q17
6
NA
24
3
Source: Company, MOSL
Exhibit 6: Tanishq posted LTL sales growth of 3% while Goldplus LTL sales declined 1%
Jewelery
Sales Gr %
LTL Growth %
Stores
4QFY15
Tanishq
(21)
(25)
176
(4)
(4)
33
1QFY16
(10)
(12)
179
(24)
(24)
33
2QFY16
(37)
(40)
183
(28)
(28)
33
3QFY16
35
30
188
(9)
(9)
33
4QFY16
(1)
(5)
195
(16)
(16)
32
9
3
199
1QFY17
(5)
(1)
30
GoldPlus Tanishq GoldPlus Tanishq GoldPlus Tanishq GoldPlus Tanishq GoldPlus Tanishq GoldPlus
Source: Company, MOSL
Exhibit 7: Watches segment posted flattish sales growth of 1% YoY
Watches
Gr %
World of Titan
Helios
Fastrack
LFS - Watches
Sales Gr (%)
Volume Growth (%)
Net sales INR b
5
12
2
11
3QFY16
Sales Growth LTL Growth
3
14
(5)
17
8.2
NA
4.8
446
41
159
NA
(6)
12
2
1
4QFY16
Stores (x) Sales Growth LTL Growth
(9)
15
(5)
(7)
(13.0)
NA
4.4
452
41
159
NA
1QFY17
Stores (x) Sales Growth LTL Growth
Stores (x)
11
7
4
15
6
13
(1)
16
1.0
NA
4.9
458
41
160
NA
Source: Company, MOSL
Exhibit 8: Titan Eye+: Sales grew 9% with LTL decline of 2%
Titan Eye+
Stores
Sales Growth (%)
LTL Growth (%)
4QFY14
280
35
21
1QFY15
300
28
13
2QFY15
323
34
19
3QFY15
341
22
9
4QFY15
366
14
0
1QFY16
384
20
13
2QFY16
398
15
1
3QFY16
399
7
(2)
4QFY16
404
18
7
1QFY17
405
9
(2)
Source: Company, MOSL
3 August 2016
3

Titan Company
Sales below expectations, margins surprise
Titan posted 1QFY17
sales growth of 3.6% YoY (est.15%) to INR28b (IndAS) with
Jewellery segment posting 3.2% YoY revenues. EBITDA grew 38% YoY (est.23%)
to INR 2.8b. Adj. PAT grew 47.5% YoY (est.26.1%) to INR2.2b.
EBITDA margins expanded 250bp YoY to 9.9%
led by gross margins expansion
of 80bp YoY and 110 bps increase in A&P neither of which is sustainable.
Management mentioned that gross margins were inflated by absence of spot
gold purchases and that A&P is unlikely to decline on a YoY basis in FY17.
Jewellery: 6% grammage growth; 3% sales growth
Jewellery segment sales grew 3.2% YoY due to depressed demand environment,
shorter wedding season this year, clampdown on black money which was earlier
invested in jewellery, and absence of activation unlike 1QFY16 in which the
company had advanced its sales season. With sales season kickin in,
management expected better demand going forward. Segment margins
increased by 150 bp YoY (adjusted for VRS) to 10.2%.
Jewellery grammage witnessed growth of 6% with average gold prices up 10% in
INR terms. Share of studded Jewellery was substantially lower at 24% in 1QFY17
compared to 29% 1QFY16.
Tanishq revenues increased 9% (with LTL sales decline of 3%) while Goldplus
revenues were down 5% (with LTL sales decline of 1%).
Watches segment: 3% sales growth pulled down by exports decline
Watches segment posted sales growth of 3.2% to INR4.9b. While domestic sales
were up by 11%, decline in exports restricted overall sales growth to low single
digits.
Adjusting for VRS, EBIT margin expanded 430bp YoY to 14.3%> Management
stated that while yearly margins are likely to be in double digits, 1QFY17 watch
margins adjusted for VRS are not sustainable
World of Titan sales increased 11% (like to like sales growth of 6%) while Helios
posted 7% sales growth and 13% LTL sales growth.
Eyewear
Eyewear sales grew 4% YoY and were muted despite activation due to lower
same store sales growth and loss of some large institutional and CSD orders in
Fastrack sunglasses business (30% of sales).
Titan Eye+ sales growth stood at 9% with like to like decline of 2%.
3 August 2016
4

Titan Company
Con-call highlights
Jewelry
Gold jewelry sales has been impacted by a) price of gold b) clampdown on
spending on unaccounted money and c) weak consumer spending
Jewelry activation July- September this year as per historical track record unlike
last year which started in June. So Last year Q2 was weak in jewelry due to
lower activation and thus will be better this year
Maintained 15% sales growth for jewelry for full year
Maintained 9-10% margins target for full year in jewelry segment
Last year April to 3rd week of May was the Wedding season, this year only April
Jewelry market is moving more and more towards studded and non- investment
Tanishq Niloufer diamond jewelry doing well
Gold exchange scheme worked well. Did not buy any spot gold during the
quarter; met demand through exchange schemes
Gold rate was higher by 10% in rupee terms
How is the customer reacting to growing gold price? Good grammage growth
6% but that is also because last year Q1FY16 was bad
Unaccounted money targeting has affected real estate first and now jewelry.
Unorganized jewelry segment is reporting 35-40% decline. Gold Retailing
landscape is changing rapidly. Gold jewelry 25% in value, studded was doing
15% before declining in June due to absence of activation
Investment seeking customers has declined due to black money.
In July price of gold high and so sales are down in gold. Studded jewelry sales
back on track. July 22% gold price also up YoY over a low base in July 2015
PAN card impact now low
80% of new stores of Tanishq in FY17 will be in new towns
Tanishq share in total jewelry market is less than 4%
Contribution of gold coins to jewelry sales is in low single digits and dropping.
Golden Harvest scheme
Government increased networth limit from 25% to 35% increasing opportunity
for GHS scheme
GHS INR 1400 cr for full year. Run rate is adequate to meet that
New cap will benefit lead to benefit in FY18 and FY19
Caratlane acquisition
Caratlane 62% acquired at INR3.6b. 62% is after considering ESOP conversion
Caratlane will be run by erstwhile owners and Titan will mainly be holding
company sharing experience. Working out synergies.
Watches
Watches-both Titan and Sonata also get affected by wedding as watches are
ideal gifting items
Fast Track watches rejuvenation on the way
Watches activation in Q1 this year and so Q1FY17 not a guide for full year
Watch 14% segment margin is sustainable? Will improve YoY but not to these
extent
Double digit EBIT margin in watches will be achieved in full year
3 August 2016
5

Titan Company
Exports 7-8% of sales of watches last year
Service 5% of watch revenues last year
This year exports down and domestic up
Other segments
Eyewear low SSG despite activation as there was lower institutional sales YoY
Eyewear 30% of sales in sunglasses now. Was higher last year and was mainly
responsible for low growth in Eyewear in 1QFY17. Hoping to make up for the
rest of the year
Precision business had an excellent quarter
VRS
265 employees accepted VRS. 970 mn impact on the quarter.
170 of 265 are from watches rest from other segment. Watches 610 mn VRS
Payback of VRS under 3 year. So savings of INR 333 mn a year from FY18
GST impact
GST proposed rate 2-6%. At the higher end will impact all jewelry companies. 2-
3% range no impact.
GST will mean books of accounts for all jewelers which is good for organized
players
Lower A&P in 1QFY17 not a trend
Last year more campaigns in watches and so lower A&P this year. Similarly
business associates meet last year in jewelry led to high costs. A&P will not
decline for full year
Valuation and view:
There are minor adjustments to our FY18 EPS as a result of the results and
management commentary. Even as we expect respectable 16% earnings CAGR
over FY16-18E (delivered 4% over FY12-16) on a lower base and healthy
contribution of GHS, we see risks emanating from still subdued demand
environment.
Valuations at 38x FY18E is rich. Maintain Neutral with revised target price of
INR360 [value at 32xJune 2018 EPS].
New
FY17E
FY18E
126,300
147,771
10,357
12,561
7,948
9,619
Old
FY17E
132,843
11,458
8,503
Change (%)
FY17E
FY18E
-4.9%
-2.1%
-9.6%
-4.7%
-6.5%
-1.9%
Source: Company, MOSL
Exhibit 9: Estimates revised by -2%
FY18E
150,869
13,179
9,801
Sales
EBITDA
PAT
3 August 2016
6

Titan Company
Exhibit 10: Titan
P/E (x)
60
45
30
15
0
28.9
12.1
PE (x)
Peak(x)
Avg(x)
51.5
Min(x)
Exhibit 11:
Titan P/E premium vs. Sensex
180
120
60
0
-60
Titan Company PE Relative to Sensex PE (%)
70.8
138.1
41.6
Source: Company, MOSL
Source: Company, MOSL
Exhibit 12: Valuation Matrix of coverage universe
Company
Consumer
Asian Paints
Britannia
Colgate
Dabur*
Emami*
Godrej Consumer
GSK Consumer
Hind. Unilever
ITC
Jyothy Labs
Marico*
Nestle
Page Industries
Parag Milk Foods
Pidilite Inds.
P&G Hygiene
Radico Khaitan
United Spirits
Retail
Jubilant Foodworks
Shopper's Stop
Titan Company
Reco
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
Neutral
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Price
(INR)
1,143
2,828
938
297
1,151
1,566
6,208
915
253
287
297
6,808
13,954
317
718
6,410
90
2,317
1,206
369
414
Mkt Cap
(USD M)
16,379
5,066
3,811
7,791
3,900
7,965
3,899
29,562
45,563
774
5,723
9,803
2,324
334
5,499
3,107
177
5,028
1,181
453
5,494
EPS Growth YoY (%)
FY16 FY17E FY18E
25.0
41.9
6.9
17.5
17.7
24.4
17.7
12.9
-3.5
24.2
23.7
-7.3
21.0
-66.7
46.6
19.8
-2.6
LP
-6.0
19.3
-13.4
20.1
21.6
8.5
12.3
10.0
22.9
9.7
7.1
17.9
-6.7
14.6
-5.5
25.0
41.1
23.0
12.0
14.7
21.1
54.0
48.9
11.4
16.3
15.2
21.4
15.5
23.9
25.8
14.7
12.8
15.6
12.4
16.6
25.5
31.3
32.5
18.2
19.7
21.0
50.8
46.1
30.9
21.0
P/E (x)
EV/EBITDA (x)
ROE (%) Div. (%)
FY16 FY17E FY18E FY16 FY17E FY18E FY16
FY16
61.7
41.7
42.7
41.6
45.7
47.2
38.0
48.0
32.8
32.8
54.1
56.8
65.6
47.2
48.4
50.2
13.9
74.9
75.7
63.3
51.6
51.4
34.3
39.4
37.0
41.5
38.4
34.6
44.9
27.8
35.2
47.2
60.1
52.5
33.4
39.3
44.9
12.1
61.8
49.2
42.5
46.3
44.1
29.8
32.4
32.1
33.5
30.5
30.2
39.8
24.0
31.3
40.4
47.9
40.0
25.2
33.3
37.5
10.0
41.0
33.7
32.5
38.2
41.3
28.4
27.1
33.5
39.0
35.0
28.0
33.6
20.8
25.3
35.9
40.0
40.9
17.6
30.6
33.6
9.9
34.6
28.2
15.1
42.7
34.2
23.7
23.7
29.9
32.3
29.4
25.2
31.2
18.5
22.5
31.8
34.9
33.3
16.0
25.4
28.8
8.6
32.6
20.5
12.5
35.1
29.4
19.6
19.5
25.8
26.7
24.2
21.1
27.6
15.8
19.9
27.1
27.8
25.7
13.1
21.4
23.3
7.3
24.4
15.1
10.3
28.7
34.4
54.6
66.8
33.2
43.4
23.4
29.9
82.4
29.3
19.2
36.2
40.9
46.9
19.5
30.4
31.2
9.3
36.7
14.1
6.3
21.3
0.8
0.9
1.1
0.7
0.7
0.6
1.1
1.7
2.7
1.4
1.1
0.7
0.7
0.0
0.6
1.0
1.1
0.0
0.2
0.0
0.6
Note: For Nestle FY16 means CY15
Source: Company, MOSL
3 August 2016
7

Titan Company
Financials and Valuations
Income Statement
Y/E March
Net Sales
Change (%)
Total Expenditure
EBITDA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Other Income - Recurring
Profit before Taxes
Change (%)
Margin (%)
Tax
Deferred Tax
Tax Rate (%)
Profit after Taxes
Change (%)
Margin (%)
Extraordinary income
Reported PAT
2011
65,209
39.5
59,352
5,857
53.5
9.0
345
82
561
5,991
80.5
9.2
1,718
32
28.1
4,305
64.6
6.6
-32
4,273
2012
88,384
35.5
80,054
8,329
42.2
9.4
449
437
941
8,385
40.0
9.5
2,389
53
27.9
6,048
40.5
6.8
-47
6,002
2013
101,127
14.4
91,011
10,116
21.4
10.0
545
506
1,008
10,072
20.1
10.0
2,854
43
27.9
7,262
20.1
7.2
0
7,262
2014
109,158
7.9
98,673
10,484
3.6
9.6
656
871
1,202
10,159
0.9
9.3
2,761
13
27.0
7,411
2.1
6.8
0
7,411
2015
119,032
9.0
107,498
11,534
10.0
9.7
874
807
706
10,559
3.9
8.9
2,410
82
22.0
8,231
11.1
6.9
0
8,231
2016
111,770
-6.1
103,179
8,591
-25.5
7.7
971
423
1,612
8,809
-16.6
7.9
1,678
19.0
7,131
-13.4
6.4
0
7,131
(INR Million)
2017E
126,300
13.0
115,943
10,357
20.6
8.2
1,068
465
1,773
10,597
20.3
8.4
2,649
25.0
7,948
11.4
6.3
0
7,948
2018E
147,771
17.0
135,211
12,561
21.3
8.5
1,175
512
1,951
12,825
21.0
8.7
3,206
25.0
9,619
21.0
6.5
0
9,619
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Deferred Tax
Capital Employed
Gross Block
Less: Accum. Depn.
Net Fixed Assets
Intangibles
Capital WIP
Investments
Curr. Assets, L&A
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liab. and Prov.
Current Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOSL Estimates
2011
444
9,810
10,254
677
15
10,946
6,089
3,393
2,696
135
194
91
33,800
19,938
1,137
10,965
1,760
25,969
24,184
1,786
7,830
10,946
2012
888
13,611
14,499
59
-38
14,520
7,271
3,693
3,578
110
249
160
42,802
28,787
1,631
9,605
2,779
32,378
29,435
2,942
10,424
14,520
0
2013
888
18,761
19,649
60
-80
19,629
8,480
4,078
4,402
84
417
185
53,579
36,779
1,638
11,365
3,797
39,039
35,478
3,561
14,541
19,629
0
2014
888
24,352
25,240
8,063
-93
33,209
10,399
4,495
5,903
59
329
230
54,456
38,672
1,520
8,925
5,338
27,768
23,938
3,830
26,688
33,209
0
2015
888
30,032
30,920
998
-197
31,721
11,902
5,103
6,799
34
549
290
50,854
40,474
1,874
2,138
6,368
26,804
22,483
4,322
24,050
31,721
0
2016
888
35,008
35,896
1,131
-239
36,787
14,227
6,057
8,170
34
540
290
52,191
42,267
1,860
2,224
5,840
24,438
20,184
4,254
27,753
36,787
0
(INR Million)
2017E
888
40,960
41,848
1,931
-324
43,454
16,302
7,156
9,146
34
540
290
60,272
45,962
2,045
5,724
6,542
26,828
22,080
4,747
33,445
43,455
0
2018E
888
47,821
48,708
2,431
-422
50,717
18,377
8,405
9,972
34
540
290
69,069
50,502
2,322
8,997
7,248
29,188
23,819
5,369
39,881
50,717
0
3 August 2016
8

Titan Company
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/Sales
EV/EBITDA
P/BV
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Debtor (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
2011
4.8
5.2
11.5
1.5
30.2
2012
6.8
7.3
16.3
2.0
30.1
2013
8.2
8.8
22.1
2.5
30.0
-863
-1,140
-1,093
2014
8.3
9.1
28.4
2.4
28.6
2015
9.3
10.3
34.8
2.8
29.9
2016
8.0
9.6
40.4
2.4
30.0
2017E
9.0
10.8
47.1
2.7
30.0
2018E
10.8
12.4
54.9
3.3
30.0
60.8
57.0
4.1
43.0
25.4
0.5
50.7
47.1
3.5
35.2
18.7
0.6
49.6
45.6
3.4
35.0
14.6
0.6
44.7
40.4
3.1
31.8
11.9
0.7
51.6
43.2
3.3
42.7
10.2
0.6
46.3
38.3
2.9
35.1
8.8
0.6
38.2
33.3
2.4
28.7
7.6
0.8
49.2
46.0
140.2
6
6.0
48.9
50.0
270.6
7
6.1
42.5
44.7
113.4
6
5.2
33.0
30.5
45.7
5
3.3
29.3
27.3
31.7
6
3.8
21.3
21.8
19.7
6
3.0
20.4
20.7
19.7
6
2.9
21.2
21.2
22.0
6
2.9
0.1
0.0
0.0
0.3
0.0
0.0
0.0
0.0
Cash Flow Statement
Y/E March
OP/(loss) before Tax
Int./Div. Received
Deferred Revenue Exp.
Depreciation & Amort.
Interest Paid
Direct Taxes Paid
Incr in WC
CF from Operations
Extraordinary Income
Incr in FA
Free Cash Flow
Investments
CF from Invest.
Issue of Shares
Incr in Debt
Dividend Paid
Others
CF from Fin. Activity
Incr/Decr of Cash
Add: Opening Balance
Closing Balance
E: MOSL Estimates
2011
5,991
-561
0
345
82
1,718
-6,461
10,600
-32
524
10,044
15
-571
0
-51
776
104
-931
9,098
1,867
10,965
2012
8,385
-941
0
449
437
2,389
3,953
1,987
-47
1,212
729
69
-1,328
444
-618
1,290
556
-2,020
-1,360
10,965
9,605
2013
10,072
-1,008
0
545
506
2,854
2,357
4,906
0
1,352
3,554
25
-1,376
0
1
1,806
-35
-1,769
1,760
9,605
11,366
2014
10,159
-1,202
0
656
871
2,761
14,588
-6,864
0
1,806
-8,670
44
-1,850
0
8,002
2,181
-453
6,274
-2,440
11,365
8,925
2015
10,559
-706
0
874
807
2,410
4,149
4,975
0
1,698
3,276
61
-1,759
0
-7,065
2,116
822
-10,003
-6,787
8,925
2,138
2016
8,809
-1,612
0
971
423
1,678
3,618
3,295
0
2,316
979
0
-2,316
0
133
2,458
-1,431
-894
85
2,138
2,224
2017E
10,597
-1,773
0
1,068
465
2,649
2,191
5,516
0
2,075
3,441
0
-2,075
0
800
2,267
-1,526
59
3,500
2,224
5,724
(INR Million)
2018E
12,825
-1,951
0
1,175
512
3,206
3,163
6,192
0
2,075
4,117
0
-2,075
0
500
2,551
-1,207
-844
3,273
5,724
8,997
3 August 2016
9

Titan Company
Corporate profile
Company description
Titan Industries (TTAN) is one of India's largest
specialty retailers. It is the market leader in
Watches and a pioneer in Branded Jewelry. The
company's economy segment watch, Sonata is
the largest selling watch in the country. TTAN
entered the branded jewelry segment in 1996
with the brand and remains the largest player
in this segment.
Exhibit 1: Sensex rebased
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Jun-16
Promoter
DII
FII
Others
53.1
4.7
21.7
20.5
Mar-16
53.1
5.6
19.7
21.6
Jun-15
53.1
3.3
21.5
22.2
Source: Capitaline
Exhibit 3: Top holders
Holder Name
Jhunjhunwala
Rakesh
ACPPJ9449M & AAEFR8176J
Matthews Pacific Tiger Fund
Dendana Investments (Mauritius) Limited
Life Insurance Corporation Of India
Jhunjhunwala Rekha Rakesh
% Holding
Radheshyam
6.6
2.8
1.8
1.6
1.6
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
C V Sankar
Bhaskar Bhat
A R Rajaram
Designation
Chairman
Managing Director
Company Secretary
Exhibit 5: Directors
Name
C G Krishnadas Nair
Harish Bhat
Ireena Vittal
T K Balaji
N N Tata
Name
Das Narayan Das
Hema Ravichandar
T K Arun
Vinita Bali
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Deloitte Haskins & Sells
P S V & Associates
Type
Statutory
Cost Auditor
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
9.0
10.8
Consensus
forecast
9.6
11.6
Variation (%)
-6.1
-6.8
Source: Bloomberg
Source: Capitaline
3 August 2016
10

Titan Company
NOTES
3 August 2016
11

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TITAN CO
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