Motilal Oswal's research report on Titan Company
The management is targeting 2.5x of FY22 sales (INR232.7b) by FY27, i.e. ~20% CAGR. It targets having over 600 Tanishq stores in 300 towns over the next three years (389 stores in Mar’22). This is in line with a similar five-year target it had set in FY18 and is on course to achieve. With ~88% share of consolidated revenue in FY22, jewelry is the key business driving TTAN’s revenue and earnings growth prospects over the medium term. The management’s focus on operating leverage-led margin expansion is encouraging and more sustainable in the Jewelry segment, where TTAN has a long runway for growth with ~6% market share.
Outlook
Expensive valuations in the near term will get burnt off by a rapid pace of growth. We maintain our Buy rating.
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