TITAN DELIVERS ROBUST REVENUE PERFORMANCE DRIVEN BY AKSHAYA TRITIYA, WEDDING JEWELLERY SALES

News: Titan’s jewellery division (Tanishq) delivered a robust performance with revenue trajectory coming in significantly ahead of consensus estimates. On a low base, overall standalone revenue growth came in at 205% YoY in Q1FY23. Jewellery revenues (excluding bullion sale) during the quarter increased 207% YoY . The jewellery division had robust sales during Akshaya Tritiya in May after two years of Covid induced lockdowns in this period. With gold prices stabilising (down 7% from March highs), demand remained strong owing to wedding jewellery and Akshaya Tritiya sales. Watches segment also witnessed healthy demand with revenue growth of 158% YoY in Q1FY23 (~106% of pre-Covid levels). The eyewear division reported revenue growth of 176% YoY (124% of pre-Covid level) driven by 56 Titan Eye Plus store additions during the quarter and strong demand from trade and distribution channels. The company’s subsidiary CaratLane (CL) revenues also increased 207% YoY. CL also achieved its highest ever sales on the day of Akshaya Tritiya, which was 20% higher than Dhanteras of 2021

Views: The company witnessed strong growth in plain gold jewellery while studded sales was comparatively higher on YoY basis. The studded mix was better than previous year and was comparable to pre-Covid levels, which augurs well for the margin trajectory for the company. Store expansion continued to be strong with 19 jewellery stores added during the quarter (six domestic Tanishq and 13 Mia stores). Titan also opened a Tanishq store in Dubai, which witnessed encouraging initial response. Watches and eyewear business also performed well during the quarter and are trending above pre-Covid revenue levels. Robust performance in challenging times reaffirms our thesis of long term market share gains for Titan. We believe Titan is a structural growth story and appears to be a key beneficiary of the unorganised to organised shift in the Indian jewellery market. We remain positive on the stock

Impact: Positive