titan company: Titan Q3 preview: Rakesh Jhunjhunwala’s top bet may post 50-60% YoY profit growth

The firm, in its quarterly business update last month, had said it has witnessed “strong demand” across its consumer businesses and clocked 36 per cent growth over the festive quarter last year.

The company is slated to post its earnings on Thursday, February 3.

Recently, seasoned investor Rakesh Jhunjhunwala increased his stake in Titan Company in the December quarter to 4.02 per cent from 3.80 earlier. Together with his wife, Rekha Jhunjhunwala, he held a 5.1 per cent stake in the December quarter compared with 4.9 per cent in the September quarter. At Wednesday’s close, their stake is worth Rs 11,150 crore.

Brokerage Sharekhan said profit after tax (PAT) is likely to be registered at Rs 870 crore in Q3FY22, up 64.1 per cent year-on-year (YoY).

It said Titan is likely to report robust revenue growth of 36 per cent YoY and 60 per cent as compared to pre-Covid level at Rs 10,394 crore for the quarter under review. It further sees improvement in operating margin by 150 bps YoY to 12.6 per cent due to better operational efficiencies.

Emkay Global, meanwhile, sees a 30 per cent YoY growth is revenue at Rs 9,504.5 crore to be led by 26 per cent CAGR in jewellery and 6-9 per cent CAGR in watches and eyewear.

“The profit for the quarter is likely to rise 55 per cent YoY to Rs 859 crore. We expect a 150 bps improvement in EBITDA margins, led by strong operating leverage and a slight improvement in the studded mix,” it said.

Another brokerage Kotak Securities eyes Titan’s Q3 profit growth of 40 per cent to be at Rs 777.6 crore and revenue growth of 19 per cent YoY to Rs 8,665 crore.

“We model a 25 per cent YoY growth in jewellery segment revenues (+20 per cent 2-year CAGR). We expect volume growth to be marginally higher than value growth as gold prices are down on a YoY basis. We also expect 25 per cent YoY growth in watches and 30 per cent YoY growth in the eyewear segment,” it said.