8 July 2019
TP: INR1,500 (+20%)
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Tough environment and high gold price impact quarter
Titan (TTAN) has released its pre-quarterly update for 1QFY20. Key highlights:
Jewellery: Growth impacted by higher gold prices
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
1112.1 / 16.2
1341 / 732
Financials Snapshot (INR b)
TTAN delivered lower-than-targeted Jewellery sales growth of ~13% YoY in
1QFY20 on account of the tough macroeconomic environment and high gold
prices (particularly in June). However, the company continued capturing
market share in the segment.
– a day considered auspicious to buy gold – sales were robust.
This festival was celebrated in the initial part of the quarter. In fact, the first
half of the quarter was good in terms of sales, with 19% YoY growth till 7
May’19 (as mentioned in 4QFY19 earnings call). However, gold prices increased
toward the second half, which, in our view, led to demand postponement,
impacting segmental growth for the quarter.
12 Tanishq stores were opened during the quarter, with net retail space
addition of 34k sq. ft.
collection of both plain and studded jewellery.
Mia launched ‘Birthstone Pendant’, ‘Facets’ and ‘Florets’ collections.
Watches: Decent sales growth partly aided by institutional order
Watches division sales increased 19% YoY in 1QFY20, partly aided by a large
institutional order from Tata Consultancy Services (TCS).
The division saw its semi-annual activation in both ‘Titan’ and ‘Fastrack’ brands
during the quarter.
It added 10
World of Titan (closed 8), 5 Fastrack (closed 2)
(closed 1) in 1QFY20.
Eyewear: Activation drives growth
Shareholding pattern (%)
Mar-19 Dec-18 Mar-18
FII Includes depository receipts
Eyewear division also saw activation during the quarter, which helped achieve
revenue growth of ~13% YoY.
Growth in trade channel exceeded that in overall division in 1QFY20.
It launched 27 new stores (and closed 9), adding 12k sq. ft. of retail space in
1QFY20 at the net level.
– Delivered good growth in 1QFY20. To target new consumers, the
company is now also focusing on small packs. E-commerce channel is
witnessing strong growth rates for
– Opened its flagship store in Hyderabad in the villa format, taking the
total store count for the division to five. The brand launched ‘1000 Summer
Memories’ collection of cotton sarees at affordable price points to drive
Krishnan Sambamoorthy – Research Analyst
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 6129 1545
Vishal Punmiya – Research Analyst
(Vishal.Punmiya@MotilalOswal.com); +91 22 6129 1547
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.