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Emkay Global
Titan Company (Buy)
Target: ₹1,650
CMP: ₹1573.75
The jewellery division grew 60 per cent in Q4FY21 (ex-B2B sales), led by 32 per cent growth in January-February 2021 and much higher growth in March 2021 due to a low base. Fourth quarter growth was driven by market share gains from regional players and a drop in gold prices.
Wedding jewellery has been a strong growth driver, increasing its share in overall jewellery and driving market share gain. Titan also indicated share gains in the key Tamil Nadu region, led by its 'hero market strategy'. The firm continued aggressive expansion by adding 26 stores in the jewellery division.
Watches recovered to 90 per cent in January-February 2021 and the segment was flat in Q4FY21. E-commerce continued to lead the recovery, while other channels remained on an improving trajectory. The eyewear segment grew 20 per cent in Q4. Among subsidiaries/JV, Caratlane maintained its strong growth trajectory with 60 per cent growth in Q4.
Jewellery growth has exceeded expectations and the momentum is likely to remain strong, driven by the wedding season ahead. While Maharashtra, a key market (15-20 per cent of jewellery revenues), may see a short-term impact due to the lockdown, strong momentum in jewellery and pent-up demand would drive further upgrades to our forecasts.
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