- 07 Apr 2022
- ICICIdirect Research
Omicron, higher gold prices impact Titan’s jewellery division revenue growth
TITAN - 3565 Change: 31.95 (0.90 %)News: After two successive quarters of strong revenue growth, Titan’s jewellery division’s revenue growth trajectory disappointed on account of dual impact of Omicron Covid variant in January and sharp rise in gold prices in March owing to external geo-political conflict. Overall standalone revenues declined 3% YoY in Q4FY22 with Jewellery revenues declining 4% YoY (5% YoY growth excluding bullion sale and sale of gold coins in base quarter). Watches, eyewear and other businesses registered YoY growth of 12%, 5% and 23%, respectively. Superior performance of Carat Lane was the only key positive during the quarter
Views: The revenue growth was below consensus estimate (15-17%) mainly owing to decline in gold jewellery, which has borne the brunt of sharp rise in gold prices probably leading to demand deferral. High single digit growth in studded sales and double digit growth in Golden Harvest Scheme Enrolments signify better underlying demand. The company’s digital arm Carat Lane continued to perform well and registered a YoY revenue growth of 51%. We believe that with stability in gold prices and impending wedding season the company would revert to higher revenue growth trajectory. We believe Titan is a structural growth story and will be a key beneficiary of the unorganised to organised shift in the Indian jewellery market
Impact: Negative