Titan Company Ltd : a three decade old company

Stock Opportunities
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Summary

  • Exchange is a huge opportunity, and we were seeing that in a market – see, what happened in
    Quarter 1 also there’s a lot of volatility in gold prices and significant high level of gold price,
    which remained for at least 2 months out of the 3 months.
    As a consequence, it was an intentional response to that market situation to solve for the
    consumers’ uncertainty. During a wedding season should I buy, not buy, there was a lot of
    confusion for customers. And we said it’s better to solve for the customer. And therefore, we
    went keeping the customer in mind, not so much competition in this case.
  • Volume growth in the jewellery segment was driven by buyer growth in both gold jewellery and gold jewellery plus gold coins. The company is targeting a 7% market share of the INR 450,000 crore overall jewellery market. The company is expecting to gain a percentage point in market share year-on-year and has successfully done so in the past. The company is targeting a double-digit market share in the next 3-4 years. The margin has settled around 11.5 and is expected to remain at that level until Q2 end. The company is expecting inventory buildup for the festive season to remain at an elevated level until Q2 end.
  • Wedding demand has been a challenge for many companies, with the specific activation being more related to the gold exchange program. The growth in wedding demand has been due to the lagan markets, specifically eastern markets. The growth in wedding demand is expected to continue in the next three quarters, with the increase in capital employed being due to the gold exchange program.
  • -Titan plans to open 30-40 new stores in India this year, up from the 20-25 stores opened in 2018.-The company plans to increase its e-commerce contribution to 7-8% of total sales, up from 6-7% in 2018.
    -Titan plans to infuse capital in its TEAL and CaratLane businesses, but does not plan to raise equity.
    -Titan plans to increase its gold mark-up rationalization program, but does not expect this to have a significant impact on gold prices.
  • NK is seeing a higher exchange rate, likely because gold prices themselves have become quite high on an absolute basis. This has caused margin dilution, but does not appear to be affecting the company’s growth trajectory. The overseas jewellery business is doing well, and the company is targeting other markets like Singapore, Australia, and looking to source locally for products required in those markets.
  • The company is expecting competitive pressures to remain high, but is confident in its brand and product offerings to protect margins. Margin protection will come from geographic and product mix considerations, as well as consumer sentiment.
  • The company’s retail stores and product offerings are substantially higher than those of competitors, and this has led to a reduction in the cost of retailing. The company’s growth strategy is to focus on increasing sales and profitability, rather than margin expansion. The company’s wearables business is growing rapidly and is highly margin accretive. The company’s brand-building initiatives are focused on increasing sales and market share in existing markets as well as new markets.
  • Discusses the company’s recent successes, including increased revenue and market share. It also discusses the company’s plans for the upcoming wedding season, which is expected to be a strong one. Finally, the conference concludes with Mr. Venkataraman’s comments.
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Titan Eyecare, a division of Titan Company, has forayed into a new vertical with the launch of its audiology segment in partnership with WS Audiology.
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As part of this collaboration, Titan has set up diagnostic tests at select stores aimed at assessing hearing capabilities and recommending suitable hearing aids (if needed).
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Having specialised in optometry for the past 15 years, Saumen Bhaumik, CEO of Eyecare Division at Titan Company explained that the company’s research extended to other sensory organs, such as the ears. The amalgamation of audiology and optometry has demonstrated success stories, and certain progressive regions globally have already entered this domain, he added.

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Met a friend who is using Bluetooth enabled glasses (frame). He was very impressed about audio quality. Mentioned he does not have to carry an extra piece of gadget ( earphones) which he keeps forgetting/loosing.

https://www.titaneyeplus.com/eyex/index.html

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hi all,
find intresting thing the of CaratLane in concall
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image
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This is super exciting, taking technology to next level.

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Q2FY23-24 Quarterly Result

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https://business.ians.in/detail/titan-company-books-rs940-crore-pat-for-q2--20231103153605

Quarterly Concall

Presentation
https://www.bseindia.com/stockinfo/AnnPdfOpen.aspx?Pname=27c7a225-cfb5-4ee1-ae82-6ed4696d8ddd.pdf

Financial
https://www.bseindia.com/stockinfo/AnnPdfOpen.aspx?Pname=49977948-8d0f-433b-aaca-8c0211f7c3d2.pdf

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I have a question as Titan has 7% market share in the jewellery space, if I am right- when there is so huge scope for growth- why they entered in saree segment.

To be honest if people want saree , the brand name of Taniera doesnt appear.

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They are diversifying into different segments, and want to become more of a lifestyle brand, than restricting being just a jewellery brand. And over time, they could very well become one, just like they became a jewellery brand from a watch brand.

Are you saying appear or appeal?

Their offerings in sarees cater to urban premium customers, they have a dedicated website to Taneira, and they are active on social networking sites, promoting their new launches, and the response is good. And these responses might be helping sales, as sales are growing, so from the looks of it, the brand is visible and reaching their intended customers.

Urban premium folk too have a lot of choices, but if Titan becomes on go-to brand among others, then they will have a place in all the segments they present in. Of course, as these being lifestyle segments, constant innovation, promotion and execution should happen, and there will be some effect from time to time on one or all of the segments.

Just some views, and have a position.

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Trying to become India’s LVMH.

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One point i didnot get…1 lakh company means what? They are already 3 lakh market cap…and if it meant sales, they are already near 50,000 cr sales, so in 5 years ,just doubling the sales??? I m confused.

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It is revenue. At this base they can’t grow faster. That is 15% CAGR.

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If thats the case ( they will grow at 15% CAGR) then investing at current PE above 90, is it risky?

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I wouldn’t invest personally at these valuations. But great companies keep throwing positive surprises.

Also, I think relative valuations are in play. When many cable making and electrical goods making companies are trading at north of 50 PE and larger ones have mcap of close to 1 lakh crore, Titan doesn’t appear very expensive.

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Yes, I am still surprised by the valuations of whole lot of companies in the market. I always feel that the valuations are superficial. I always find it hard to digest the valuations of companies like Apple, but it kept on pushing the limits and surprised me. I still cannot fathom how can one comfortably take new positions at those absurd market caps.

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