Titan Company: Losing luster

#1
We downgrade the stock to SELL with TP Rs 560 (35x FY22 EPS) and cut our FY21/22 EPS by 63%/25%

We have done lot of channel checks and interacted with various stakeholders involved in this industry (Regional / Family Run jewellery; Consultants, Jewellery contract manufacturers, Officials of hallmarking association; members of IBJA and GJEPC etc).

Key pointers

1) Demand destruction at its peak
#Sharp spike in gold prices
#Deadly combo of Adik maas and Shraddh
#Increased contribution from the margin-dilutive ‘Gold Exchange Scheme’
#High profitable L1 stores (located in malls) - adherence to social distancing
#Postponement and cancellation of wedding and festive season
2) Family-run jewellers to get their mojo back:

3) Store expansion to curtailed in the near term

4) Increased support to channel partners in an otherwise weak demand environment.

The complete report found Philip Capital website --> Click Here to get report
 
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