Jewellery, watches segment propel robust revenue growth for TitanTITAN - 2616 Change: -2.25 (-0.09 %)
Titan reported yet another robust quarter with healthy beat on consensus estimates. The company witnessed strong double-digit growth across most segments (except eyewear division) with overall sales increasing 18% YoY in Q2FY23. The revenue is 9-10% higher than consensus estimates. Jewellery segment continued to glitter with 18% sales growth (excluding gold bullion sale). The growth is impressive (three-year CAGR: 28%) considering that the previous quarter (Q2FY22) had a high base, which had elements of pent-up demand and spill over purchases of a Covid disrupted Q1FY22. Watches division also continued its healthy trajectory with topline growth of 20% (three-year CAGR: 5%). CaratLane (72% owned subsidiary), continues to scale up rapidly with sales growth of 56% YoY.
The company has clocked robust growth in H1FY23. As per our estimates, we expect Titan to exit with more than 30% YoY revenue growth in FY23E (driven by jewellery segment). Over a long term, the company aspires to grow jewellery revenues by 2.5x by FY27 (implied CAGR: 20% from FY22 base). Titan’s new growth engine CaratLane has already clocked ~ Rs 1000 crore sales in H1FY23 (FY22: Rs 1250 crore) and is on track to achieve Rs 2000+ crore sales in FY23. We expect gross margins to improve in Q2FY23 as studded sales were higher than the overall division driven by good activations and better contribution from high value purchases.