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Titan Industries: Blockbuster performance

Titan Industries (Titan) continued with its outperformance, now for three quarters in a row with Q3FY2011 clocking a stellar 46.6% growth in the top line led by both, watches (+35% year on year [YoY]) as well as the jewelry business (+50% YoY). The same store sales momentum was strong with the “World of Titan” stores (for watches) reporting a 13% growth and branded jewelery Tanishq outlets churning out a 40% same store sales growth. Margins expanded 250 basis points YoY on account of an enriched product mix coupled with a strong operating leverage that played its way. Led by a strong operating performance, coupled with robust other income, the profit after tax (PAT) grew 82.4% YoY.

To factor in the Q3FY2011 outperformance, coupled with a buoyant economic environment, we upgrade our FY2011-13 estimates by 10-12%. Our revised earning per share (EPS) for FY2011, FY2012 and FY2013 stands at Rs101, Rs127 and Rs152 respectively. Our estimates are higher than the consensus estimates. We believe that consensus estimates would also get upgraded soon to factor in the outperformance. We continue to remain bullish on the strong franchise led, brand equity model of Titan