Q4FY21 is expected to be normal – Titan

Update on the Indian Equity Market:
On Wednesday Nifty closed 1% higher at 13,601. Among the sectoral indices, Realty (+3.9%), Media (+3.3%), and IT (+2.4%) closed higher. None of the sectors closed lower. Wipro (+5.7%), Cipla (+3.7%), and Tata Steel (+3.40%) closed on a positive note. Hero Motors (-1.0%), Divis labs(-0.7%), and Titan (-0.5%) were among the top losers.

Excerpts from an interview of Mr. S Subramanian, CFO, Titan with CNBC-TV18 dated 22nd December 2020:

● Mr S. Subramanian said there is a strong space for growth in jewellery sector over the next 5-10 years.
● The company has established itself as the market leader and the balance sheet is stronger.
● On other businesses, he said wearables are now a very exciting opportunity. With focus of people on wellness the company is looking for substantial growth in that segment.
● On eyewear, he said the market is significantly underpenetrated and there is a lot of opportunity to grow.
● He expects the company to come out stronger post covid crisis and the focus will be on people.
● On guidance, he said the 4QFY21E is expected to be normal and the good news is vaccine coming.
● The footfalls are improving even in malls and he expects that the worst to be over.
● On weddings, he said that the spends on weddings are lower, it provides an opportunity for people to spend more on jewellery. The company is also witnessing an increase in ticket size spends.
● He said the devices which will track people’s well-being would become important and so (Digital fitness watches) in Watches is a very exciting area.

Consensus Estimate: (Source: market screener and Investing.com websites)
● The closing price of Titan was ₹ 1491 as of 23-December-2020. It traded at 149x/ 69x/ 56x the consensus Earnings per share estimate of ₹ 10/22/27 for FY21E/ FY22E/ FY23E respectively.
● The consensus average target price for Titan is ₹ 1068/- which implies a PE multiple of 40x on FY23E EPS of 27/-.

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