Titan Industries - result update-Jan-13-EDELbreport.myiris.com/ES1/TITINDUS_20130130.pdf ·...
Transcript of Titan Industries - result update-Jan-13-EDELbreport.myiris.com/ES1/TITINDUS_20130130.pdf ·...
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Edelweiss Securities Limited
Titan Industries’ (Titan) Q3FY13 sales and PAT were bang in line with our
estimates aided by the festive and marriage season. Key positives include:
(1) strong surge in jewellery revenue aided by 12% YoY volume growth
(dipped 11% and 21% YoY in Q2FY13 and Q1FY13, respectively) driven by
Tanishq, which posted sales growth of 19% YoY with LTL growth of 10%
YoY; (2) recovery in watches volume at 4% YoY against 1% YoY in H1FY13;
and (3) robust retail expansion (added 39 new stores across formats). Key
negatives were: (i) drop in share of studded jewellery; and (ii) muted sales
growth of PED (due to temporary issue of order postponement). We
expect Titan to be one of the key beneficiaries of likely improvement in
consumer sentiments (due to cut in interest rates, policy reforms and
rising stock market) and likely rupee appreciation (will aid watch margin).
Maintain ‘BUY’.
This report also contains Q3FY13 conference call highlights.
Jewellery shimmers on festive cheer
Jewellery grew 26.7% YoY to ~INR25.2bn. Tanishq posted 10% LTL growth (12% YoY
growth in Q2FY13) and GoldPlus LTL growth improved to 12% YoY (dipped 8% YoY in
Q2FY13); net closure of one store. Share of studded jewellery declined to 22% from
26.2% in Q2FY12. Customer growth rose 12% YoY (against 7%, (2%) and 4%, Q2FY13,
Q1FY13 and Q4FY12, respectively); ticket size increased 2% YoY. Watches sales grew at
10.6% YoY and volume grew 4% YoY. While eyewear surged an impressive 21% YoY, PED
faced temporary issues.
Margin: Jewellery shines, but watches disappoint
Jewellery margin stood at 9.8%, which improved 21bps YoY. Watches EBIT margin
dipped 46bps YoY due to excise hike and higher material costs.
Outlook and valuations: Positive; maintain ‘BUY’
We expect Titan’s volume and margin to improve in the coming quarters. The stock is
trading at P/E of 33.8x and 27.6x on FY13E and FY14E, respectively. We maintain ‘BUY’
recommendation and ‘Sector Outperformer’ rating on the stock.
RESULT UPDATE
TITAN INDUSTRIES Shining on festive glitter
EDELWEISS 4D RATINGS
Absolute Rating BUY
Rating Relative to Sector Outperformer
Risk Rating Relative to Sector Low
Sector Relative to Market Underweight
MARKET DATA (R: TITN.BO, B: TTAN IN)
CMP : INR 276
Target Price : INR 320
52-week range (INR) : 314 / 190
Share in issue (mn) : 887.8
M cap (INR bn/USD mn) : 245 / 4,586
Avg. Daily Vol.BSE/NSE(‘000) : 2,494.6
SHARE HOLDING PATTERN (%)
Current Q2FY13 Q1FY13
Promoters *
53.1 53.1 53.1
MF's, FI's & BK’s 3.4 3.4 3.8
FII's 17.3 17.3 16.2
Others 26.2 26.2 27.0
* Promoters pledged shares
(% of share in issue)
: NIL
PRICE PERFORMANCE (%)
Stock Nifty
EW Retail
Index
1 month (2.0) 2.5 10.5
3 months 7.0 8.2 12.9
12 months 36.8 19.0 5.9
Abneesh Roy
+91 22 6620 3141
Hemang Gandhi
+91 22 6620 3148
Pooja Lath
+91 22 6620 3075
India Equity Research| Retail
January 30, 2013
Financials
Year to March Q3FY13 Q3FY12 % change Q2FY13 % change FY12 FY13E FY14E
Net rev. (INR mn) 30,178 24,401 23.7 22,760 32.6 88,493 102,411 124,462
EBITDA (INR mn) 2,828 2,249 25.7 2,494 13.4 8,363 10,087 12,384
Net profit (INR mn) 2,037 1,639 24.3 1,801 13.1 6,015 7,239 8,862
EPS (INR) 2.3 1.8 2.0 6.8 8.2 10.0
P/E (x) 40.7 33.8 27.6
EV/EBITDA 28.1 22.7 18.3
ROAE (%) 48.2 42.2 38.9
Retail
2 Edelweiss Securities Limited
Q3FY13 concall: Key takeaways
Jewellery sales: Jewellery grew at 26.7% YoY (on base of 25% YoY) to INR25.1bn. Volume
growth was 12% YoY (down 21% and 11% YoY in Q1FY13 and Q2FY13, respectively).
Customer growth stood at 12% YoY with Tanishq posting 11% YoY LTL growth (3% and 12%
YoY growth in Q1FY13 and Q2FY13, respectively), GoldPlus saw LTL growth 12% YoY (8% YoY
decline in Q1FY13 and Q2FY13 each). Share of studded jewellery decreased to 22% YoY
(against 25% and 32% YoY in Q1FY13 and Q2FY13, respectively). Increase in share of gold
jewellery (as expected) led to overall jewellery margin of 9.8% YoY (Q2FY13 was the highest
jewellery margin quarter due to high share of studded jewellery on the back of activations in
diamond). Studded jewellery posted single digit growth. December saw sustained sales
momentum as in the festive period, though some moderation was seen in January. Titan’s
jewellery EBIT grew 29.5% YoY to INR2.5bn with slight margin improvement of 21bps YoY to
9.8%.
Drop in share of studded jewellery: Studded jewellery witnessed single digit growth as
some consumers preferred gold jewellery over diamond (seen for other players also).
However, this may be a temporary phenomenon. Titan has maintained its target of
achieving 40% of studded jewellery share over the longer term.
RBI’s harsh stance on gold: Direct import of gold, which can lead to 50bps improvement in
margin (due to savings of 1% VAT paid), has been delayed as the credit day for direct import
is reduced to 90days. Titan has thus chosen to compromise the margin benefit to maintain
working capital cycle by importing gold from domestic banks which offer 180 days of credit
period (though this leads to 25bps margin reduction). The company has applied to RBI to
consider its case to extend credit days on direct import to 180. RBI’s current harsh stance on
gold loan may lead to domestic banks reducing the credit period as well. In that case, Titan
will evaluate all available options; including direct import of gold which will be more
lucrative then.
Expansion in jewellery: Titan added 49,000 sq ft in Tanishq in Q3FY13, taking the total area
to 0.504mn sq ft. Also, larger Goldplus stores are being planned in FY13 in existing towns.
Mia range has experienced exceedingly good response; MQ range has only been soft
launched and not deployed to exploit its full potential.
Watches: Watches segment revenue grew 10.6% YoY (to INR4.2bn); volume grew 4% YoY
(up 2% YoY in 9MFY13). EBIT rose 6.5% YoY; margins posted marginal decline of 46bps due
to higher COGS on account of INR volatility and not due to Helios format. The moderation in
decline is mainly attributable to impact of price hikes initiated in CY12. Titan expects margin
to have bottomed out and will benefit from rupee appreciation.
Others: Eyewear posted 21% YoY revenue growth. Titan Eye+ reported LTL growth of 14%
YoY. Precision engineering (PED) experienced some slowdown due to temporary issue of
delayed invoicing.
Retail expansion: Expansion remains on track. Titan added 6 World of Titan showrooms, 10
Fastrack, 9 Helios and 9 Tanishq stores. Total area of 49,000 sq ft was added in jewellery in
Q3FY13.
Titan Industries
3 Edelweiss Securities Limited
Expansion into newer categories: Titan’s entry into helmet category has been delayed.
Titan indicated that will establish itself in the kid’s accessories space. It clarified that it has
no intention to venture into the edutainment space.
Ad spends: Ad spends have dipped 133bps YoY as Titan has decreased brand level
investment, though investment at consumer level has been kept intact.
Other income: Titan reported 11% dip in other income, which mainly comprises sale of non-
moving jewellery and stones.
Recent developments
• Mr. N. S. Palaniappan, nominee of Tamilnadu Industrial Development Corporation
(TIDCO), was appointed as Chairman & Director on the Board of the Company after Mr.
Vikram Kapur, resigned as Chairman & Director consequent to his transfer.
• Titan is looking at tier 2 and 3 locations to derive growth in its mid to high end watches
retail segment Helios.
• Tanishq launched fashion jewellery collection IVA (18kt gold range that starts at
INR20,000) and will be available in Tanishq stores across Delhi, Mumbai, Bengaluru,
New Delhi, Kolkata, Pune, Ludhiana, Chandigarh and Hyderabad.
• Titan plans to add 100 Helios stores in the next 2-3 years and currently has 37 stores in
the country’s top cities.
• Helios stores 25 international brands and is in talks with other brands in the price range
of INR7,000‐30,000.
• Titan is setting up one more assembly unit in Uttarakhand at an investment of
INR500mn to produce jewellery.
• It launched an exclusive new collection under its Tycoon range of watches for men
targeted at entrepreneurs and self employed businessmen. The price range is from
INR3,495 to INR15,995.
• Titan will expand its accessories division—belts for women and handbags made of pure
leather will be launched by December In a survey when asked about brand recall
December. survey, and the most admired ones, Tanishq emerged on the top in both
categories. It was followed by Mehrason (84%), PC Jewellers (84%), Nakshatra (81%),
Sanchi (77%) and Gitanjali (63%).
Sector developments
• The government raised the import duty on gold and platinum to 6% from 4% with
immediate effect. It also announced reduction of maturity of gold to 6 months from 3
years.
• RBI capped gold lease period for direct gold imports at 90 days. This is against 180 days
gold lease available to Titan through domestic banks.
Other companies’ developments
• PC Jewellers successfully completed its IPO worth INR6bn at a price band of INR125‐135/ share.
• Gitanjali Group has acquired domestic brands Nirvana and Viola which will help the
company gain an additional market share of 15%.
Retail
4 Edelweiss Securities Limited
• Gitanjali Jewels is planning to open 60‐65 stores in smaller towns by end 2013 and will
bank on the increasing income levels and brand consciousness in these towns.
• Forevermark (diamond brand from De Beers) has partnered with Sunny Diamonds to
unveil its new collection in the Kerala market. De Beers has partnered with 85 retailers
in 13 cities.
• Forevermark plans to set up 130‐140 retail outlets in the country by 2013 end.
• Shree Ganesh Jewellery House has announced 75:25 joint venture with Rock Creation
of Dhaka (Bangladesh). The JV will set up a manufacturing unit in Dhaka 200kg of gold
jewellery capacity at an initial investment of INR200mn, which will be increased to
INR500mn.
Outlook and valuations: Positive; maintain ‘BUY’
Titan’s jewellery volumes revived in Q3FY13 owing to the festive and marriage season.
Watches volume growth has also picked up and price hike in watches has come into full
effect. Expansion remains on track, which will help sustain growth. We expect Titan to be
one of the key beneficiaries of likely improvement in consumer sentiments (due to cut in
interest rates, rising stock markets and policy reforms) and likely rupee appreciation (will
aid watch margins). Hence, we assign a higher target P/E of 32x (30x earlier) and arrive at a
target price of INR320. At CMP, the stock is trading at 33.8x and 27.6x FY13E and FY14E EPS,
respectively, and maintain ‘BUY’ and rate the stock ‘Sector Outperformer’ on relative
return basis.
Chart 1: Jewellery margin up YoY Chart 2: Jewellery revenue growth picks up
Source: Company, Edelweiss research
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Titan Industries
5 Edelweiss Securities Limited
Chart 3: Watches margin dip YoY Chart 4: Watches revenue growth slows down
Chart 5: Others EBIT margin contract Chart 6: Others revenue growth flattish
Source: Company, Edelweiss research
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Retail
6 Edelweiss Securities Limited
Table 1: Segmental performance
Table 2: Growth across formats
Table 3: Aggressive expansion plan (no. of stores)
Source: Company, Edelweiss research
% growth % growth
Titan (Year to March) Q3FY13 Q3FY12 Y-o-Y Q2FY13 Q-o-Q
Revenue
Watches & clocks 4,235 3,831 10.6 4,718 (10.2)
Jewellery 25,152 19,859 26.7 17,239 45.9
Others 983 942 4.3 974 0.9
Corporate unallocated 28 16 69.5 67 (58.6)
Total 30,398 24,648 23.3 22,998 32.2
PBIT
Watches & clocks 512 480 6.5 547 (6.5)
Jewellery 2,466 1,904 29.5 2,150 14.7
Others 17 51 (66.8) (43) (139.3)
Total 2,994 2,436 22.9 2,654 12.8
PBIT margins
Watches & clocks 12.1 12.5 (46) 11.6 49
Jewellery 9.8 9.6 21 12.5 (267)
Others 1.7 5.4 (370) (4.4) 618
Total 9.8 9.9 (3) 11.5 (169)
Sales value growth (% YoY) Like to Like growth (% YoY)
World of Titan 14 11
Tanishq 19 10
Goldplus 6 12
Helios 85 18
Fastrack 97 31
LFS - Watches 20 10
Titan Eye+ 24 14
FY09 FY10 FY11 FY12 Q1FY13 Q2FY13 Q3FY13 FY13E
Jewellery 145 146 151 163 166 168 176 213
Tanishq 113 114 120 129 132 134 143 164
Goldplus 30 30 29 32 32 32 31 47
Zoya 2 2 2 2 2 2 2 2
Watches 265 316 364 459 472 502 527 632
World of Titan 265 291 311 332 337 348 354 387
Fastrack 24 47 102 110 122 132 180
Helios 1 6 25 25 32 41 65
EyePlus 70 82 150 205 209 209 215 225
Total 480 544 665 827 847 879 918 1,070
Titan Industries
7 Edelweiss Securities Limited
Financial snapshot (INR mn)
Year to March Q3FY13 Q3FY12 % change Q2FY13 % change YTD13 FY13E FY14E
Net revenues 30,178 24,401 23.7 22,760 32.6 74,994 102,411 124,462
Raw material costs 23,207 18,288 26.9 16,343 42.0 55,800 75,374 91,666
Ad spend 1,088 1,205 (9.8) 983 10.7 3,105 4,608 5,601
Employee expenses 1,169 979 19.4 1,161 0.7 3,369 4,660 5,725
Other expenses 1,887 1,680 12.3 1,780 6.0 5,280 7,681 9,086
EBITDA 2,828 2,249 25.7 2,494 13.4 7,441 10,087 12,384
Depreciation 142 119 19.0 130 8.9 395 533 638
EBIT 2,686 2,129 26.1 2,364 13.6 7,046 9,554 11,746
Other income 220 247 (11.0) 238 (7.6) 710 970 1,121
EBIT including other income 2,906 2,377 22.3 2,602 11.7 7,756 10,524 12,867
Interest 117 129 (9.7) 121 (3.7) 364 469 559
Profit before tax 2,789 2,247 24.1 2,481 12.4 7,392 10,054 12,308
Tax 752 608 23.5 679 10.6 1,992 2,815 3,446
Diluted EPS (INR) 2.3 1.8 24.3 2.0 13.1 6.1 8.2 10.0
As % of net revenues
Raw material 76.9 74.9 71.8 74.4 73.6 73.7
Ad spend 3.6 4.9 4.3 4.1 4.5 4.5
Employee cost 3.9 4.0 5.1 4.5 4.5 4.6
Other expenses 6.3 6.9 7.8 7.0 7.5 7.3
Total expenses 90.6 90.8 89.0 90.1 90.2 90.0
EBITDA 9.4 9.2 11.0 9.9 9.9 9.9
PBT 9.2 9.2 10.9 9.9 9.8 9.9
Adjusted net profit 6.8 6.7 7.9 7.2 7.1 7.1
Tax rate 26.9 27.1 27.4 26.9 28.0 28.0
Retail
8 Edelweiss Securities Limited
Company Description
Titan was incorporated in 1984 as a joint venture between the TATA Group and Tamil Nadu
Industrial Development Corporation (TIDCO), a Government of Tamil Nadu undertaking. The
company manufactures and markets quartz watches since 1987 and is now India’s leading
watch manufacturer and retailer. Gradually, jewellery, precision engineering, eyewear,
accessories, and licensed products were added to the watches portfolio to leverage on the
premium positioning that was assiduously achieved and the success of the Titan brand was
extended to Tanishq and other retail businesses. Its watch brands include Titan, Edge,
Fastrack, Nebula, Raga, Steel, Regalia, Bandhan, Zoop, and Sonata. The company has also
acquired a license for marketing global brands Tommy Hilfiger and Hugo Boss in India.
Investment Theme
The Indian retail landscape is evolving with interplay of several demographic and economic
factors. The long-term prospects backed by changing consumer behaviour in favour of larger
discretionary spending, has set the stage for a healthy growth in the retail space over the
next five years. The big opportunity lies in the growing share of organised retail with
growing trend among consumers to allocate a larger share of income to consumption and
gradual improvement in lifestyle.
Titan has assiduously positioned itself in the premium watch and designer jewellery space.
With constant product innovation it has become the largest organised player in both these
segments. Given its well established brand and sound management we expect Titan to
replicate this success in its new eyewear venture as well. We believe Titan has the ability to
create significant value with its large distribution presence, strong brand, designing skills
and proven execution track record.
Key Risks
Deterioration of macro conditions: Poor macro outlook could lead to prolonged slowdown
in the company’s growth as the company’s revenues depend on discretionary spend.
Volatility in gold prices: Gold prices have a significant bearing on gold demand. Any steep
rise in prices results in lower demand, and investment buying that comes in is low margin.
Margin pressure due to deterioration in product mix and investment buying:
Down trading in watches and jewellery divisions on account of fall in discretionary spending
and higher growth in tier II and IV towns could impact margins.
Sustained losses in new initiatives: New initiatives like Eye+ and the precision engineering
division are currently a drain on profitability. With the slowdown in consumption these are
unlikely to turn around in the next couple of years. Prolonged losses in these divisions will
impact overall profitability.
Business seasonal, restricted to marriage season and festivals: The jewellery segment is
seasonal with respect to marriage season and festivals. Additionally, the number of wedding
dates varies in a year. This could impact the company’s revenue.
9 Edelweiss Securities Limited
Titan Industries
Financial Statements
Income statement (INR mn)
Year to March FY12 FY13E FY14E FY15E
Net revenue 88,493 102,411 124,462 148,736
Materials costs 65,402 75,374 91,666 109,544
Gross profit 23,091 27,036 32,796 39,192
Employee costs 3,977 4,660 5,725 6,842
Other Expenses 6,937 7,681 9,086 10,783
Advertisement & sales costs 3,814 4,608 5,601 6,619
EBITDA 8,363 10,087 12,384 14,948
Depreciation & Amortization 456 533 638 758
EBIT 7,906 9,554 11,746 14,190
Other income 936 970 1,121 1,265
EBIT incl. other income 8,842 10,524 12,867 15,455
Interest expenses 437 469 559 512
Profit before tax 8,405 10,054 12,308 14,943
Provision for tax 2,390 2,815 3,446 4,184
Net profit 6,015 7,239 8,862 10,759
Share in profit of associates (1) - - -
Profit after minority interest 6,014 7,239 8,862 10,759
Shares outstanding (mn) 888 888 888 888
Diluted EPS (INR) 6.8 8.2 10.0 12.1
Dividend per share (INR) 1.8 2.1 2.6 3.2
Dividend payout (%) 25.8 26.0 26.0 26.0
Common size metrics
Year to March FY12 FY13E FY14E FY15E
Materials costs 73.9 73.6 73.7 73.7
Employee expenses 4.5 4.5 4.6 4.6
EBITDA margins 9.4 9.8 9.9 10.1
Net profit margins 6.8 7.1 7.1 7.2
Growth ratios (%)
Year to March FY12 FY13E FY14E FY15E
Revenues 35.4 15.7 21.5 19.5
EBITDA 35.6 20.6 22.8 20.7
Net profit 38.9 20.4 22.4 21.4
EPS 38.9 20.4 22.4 21.4
Key Assumptions
Year to March FY12 FY13E FY14E FY15E
Company
GDP(Y-o-Y %) 6.5 5.5 6.5 7.0
Inflation (Avg) 8.8 7.8 6.0 6.0
Repo rate (exit rate) 8.5 7.5 6.8 6.0
USD/INR (Avg) 47.9 54.5 54.0 52.0
Revenue growth (Y-o-Y %)
Watch - growth (%) 20.2 12.5 18.0 16.0
Jewellery - growth (%) 39.5 16.0 22.0 20.0
Eyewear - growth (%) 26.0 24.0 25.0 22.0
Other - growth (%) 43.7 27.0 30.0 26.0
EBITDA margin (%)
COGS as % of sales 73.9 73.6 73.7 73.7
Gold as % of COGS 79.8 80.1 80.5 80.5
Components as % of COGS 9.4 9.5 9.6 9.6
Purchase goods as % of COGS 17.6 17.3 17.2 17.2
Staff costs as % of sales 4.5 4.5 4.6 4.6
A&P as % of sales 4.3 4.5 4.5 4.5
Financial assumptions
Tax rate (%) 28.4 28.0 28.0 28.0
EBITDA margin 9.4 9.8 9.9 10.1
Capex (INR mn) 1,283 1,401 2,000 2,010
Debtor days 10 9 9 9
Inventory days 101 101 100 100
Payable days 92 92 92 92
Cash conversion cycle (days) 19 18 18 18
Depreciation as % of gross block 6.1 6.0 6.0 6.0
Interest rate on cash 9.7 10.0 7.1 7.1
Dividend as % of net profit 25.8 26.0 26.0 26.0
10 Edelweiss Securities Limited
Retail
Peer comparison valuation
Market cap Diluted PE (X) EV/EBITDA (X) ROAE (%)
Name (USD mn) FY13E FY14E FY13E FY14E FY13E FY14E
Titan Industries 4,586 33.8 27.6 22.7 18.3 42.2 38.9
Jubilant Foodworks 1,465 52.8 37.8 29.1 21.0 39.4 37.4
Pantaloon Retail 1,047 49.7 30.5 8.4 7.9 2.8 3.8
Shoppers Stop 676 129.8 66.0 33.6 21.7 5.3 9.9
AVERAGE 66.5 40.5 23.5 17.2 22.4 22.5
Source: Edelweiss research
Cash flow metrics
Year to March FY12 FY13E FY14E FY15E
Operating cash flow 1,595 10,166 7,282 8,995
Investing cash flow (699) (1,401) (2,000) (2,010)
Financing cash flow (2,349) (2,673) (3,251) (3,777)
Net cash flow (1,453) 6,091 2,031 3,208
Capex (1,283) (1,401) (2,000) (2,010)
Dividends paid (1,806) (2,183) (2,673) (3,245)
Share issuance/(buyback) 444 - - -
Profitability & efficiency ratios
Year to March FY12 FY13E FY14E FY15E
ROAE (%) 48.2 42.2 38.9 36.3
ROACE (%) 61.5 55.6 51.6 47.9
Inventory day 101 101 100 100
Debtors days 10 9 9 9
Payable days 92 92 92 92
Cash conversion cycle (days) 19 18 18 18
Current ratio 1.0 1.0 1.0 1.1
Debt/Equity - - - -
Interest coverage 18.1 20.4 21.0 27.7
Operating ratios
Year to March FY12 FY13E FY14E FY15E
Total asset turnover 6.9 6.0 5.5 5.0
Fixed asset turnover 24.8 22.6 22.1 21.4
Equity turnover 7.1 6.0 5.5 5.0
Valuation parameters
Year to March FY12 FY13E FY14E FY15E
Diluted EPS (INR) 6.8 8.2 10.0 12.1
Y-o-Y growth (%) 38.9 20.4 22.4 21.4
CEPS (INR) 7.3 8.8 10.7 13.0
Diluted PE (x) 40.7 33.8 27.6 22.7
Price/BV (x) 16.7 12.4 9.5 7.3
EV/Sales (x) 2.7 2.2 1.8 1.5
EV/EBITDA (x) 28.1 22.7 18.3 15.0
Dividend yield (%) 0.6 0.8 0.9 1.1
Balance sheet (INR mn)
As on 31st March FY12 FY13E FY14E FY15E
Equity capital 888 888 888 888
Reserves & surplus 13,721 18,777 24,966 32,480
Shareholders funds 14,609 19,665 25,854 33,368
Long term debt 59 49 39 28
Current maturity of long term 54 44 34 25
Borrowings 113 93 73 53
Deferred tax liability (35) (35) (35) (35)
Sources of funds 14,687 19,723 25,892 33,386
Tangible assets 3,630 4,597 5,959 7,201
Intangible assets 209 209 209 209
CWIP (incl. intangible) 249 150 150 160
Total net fixed assets 4,088 4,956 6,318 7,569
Non current investments 24 24 24 24
Cash and equivalents 9,671 15,762 17,793 21,001
Inventories 28,820 28,213 34,254 40,894
Sundry debtors 1,652 1,609 1,921 2,255
Loans and advances 2,541 2,654 3,192 3,774
Other current assets 328 328 328 328
Total current assets (ex cash) 33,341 32,804 39,694 47,250
Trade payable 17,529 18,916 23,030 27,551
Others current liabilities 14,907 14,907 14,907 14,907
Total current liabilities & 32,437 33,823 37,937 42,459
Net current assets (ex cash) 904 (1,020) 1,757 4,791
Uses of funds 14,687 19,723 25,892 33,386
Book value per share (INR) 16.5 22.2 29.1 37.6
Free cash flow (INR mn)
Year to March FY12 FY13E FY14E FY15E
Net profit 6,014 7,239 8,862 10,759
Add : Non cash charge 895 1,003 1,197 1,270
Depreciation 456 533 638 758
Others 439 469 559 512
Gross cash flow 6,908 8,242 10,059 12,029
Less: Changes in WC 7,494 (1,924) 2,777 3,034
Operating cash flow (585) 10,166 7,282 8,995
Less: Capex 1,283 1,401 2,000 2,010
Free cash flow (1,869) 8,764 5,282 6,985
11 Edelweiss Securities Limited
Titan Industries
Insider Trades Reporting Data Acquired / Seller B/S Qty Traded
22 Feb 2012 Tata AIG Life Insurance Company Limited Sell 500000
24 Feb 2012 Tata AIG Life Insurance Company Limited Sell 159779
06 Mar 2012 Tata AIG Life Insurance Company Limited Sell 40000
07 Mar 2012 Tata Sons Ltd Buy 1381051
*in last one year
Bulk Deals Data Acquired / Seller B/S Qty Traded Price
No Data Available
*in last one year
Holding – Top10 Perc. Holding Perc. Holding
Jhunjhunwal Rakesh Radheys 7.49 Jhunjhunwala Rekha Rakesh 2.49
Matthews International Capital 1.70 Fidelity Management & Research 1.14
Vanguard Group Inc 1.12 Merrill Lynch Capital Markets Es 1.04
Iifl Vontobel India Sel Eq 1.04 Hdfc Asset Management Co Ltd 0.76
T Rowe Price Associates 0.75 Uti Asset Management Co Ltd 0.59
*as per last available data
Additional Data
Directors Data
Dr. N Sundaradevan Chairman Mr. V Parthasarathy Non-Executive, Non-Independent Director
Mr.Ishaat Hussain Director Mr.N.N.Tata Non-Executive, Non-Independent Director
Mr. Bhaskar Bhat Managing Director Mr. T.K.Balaji Non-Executive, Independent Director
Dr. C.G.Krishnadas Nair Non-Executive, Independent Director Ms. Vinita Bali Non-Executive, Independent Director
Ms. Hema Ravichandar Non-Executive, Independent Director Mr. R Poornalingam Non-Executive, Independent Director
Prof. Das Narayandas Non-Executive, Independent Director
Auditors - Deloitte Haskins & Sells
*as per last annual report
12 Edelweiss Securities Limited
Company Absolute
reco
Relative
reco
Relative
risk
Company Absolute
reco
Relative
reco
Relative
Risk
Jubilant Foodworks HOLD SP M Pantaloon Retail HOLD SU H
Shoppers Stop BUY SP L Titan Industries BUY SO L
RATING & INTERPRETATION
ABSOLUTE RATING
Ratings Expected absolute returns over 12 months
Buy More than 15%
Hold Between 15% and - 5%
Reduce Less than -5%
RELATIVE RETURNS RATING
Ratings Criteria
Sector Outperformer (SO) Stock return > 1.25 x Sector return
Sector Performer (SP) Stock return > 0.75 x Sector return
Stock return < 1.25 x Sector return
Sector Underperformer (SU) Stock return < 0.75 x Sector return
Sector return is market cap weighted average return for the coverage universe
within the sector
RELATIVE RISK RATING
Ratings Criteria
Low (L) Bottom 1/3rd percentile in the sector
Medium (M) Middle 1/3rd percentile in the sector
High (H) Top 1/3rd percentile in the sector
Risk ratings are based on Edelweiss risk model
SECTOR RATING
Ratings Criteria
Overweight (OW) Sector return > 1.25 x Nifty return
Equalweight (EW) Sector return > 0.75 x Nifty return
Sector return < 1.25 x Nifty return
Underweight (UW) Sector return < 0.75 x Nifty return
13 Edelweiss Securities Limited
Titan Industries
Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina, Mumbai – 400 098.
Board: (91-22) 4009 4400, Email: [email protected]
Vikas Khemani Head Institutional Equities [email protected] +91 22 2286 4206
Nischal Maheshwari Co-Head Institutional Equities & Head Research [email protected] +91 22 4063 5476
Nirav Sheth Head Sales [email protected] +91 22 4040 7499
Coverage group(s) of stocks by primary analyst(s): Retail
Jubilant Foodworks, Pantaloon Retail, Shoppers Stop, Titan Industries
Distribution of Ratings / Market Cap
Edelweiss Research Coverage Universe
Rating Distribution* 118 46 17 181
* - stocks under review
Market Cap (INR) 117 57 7
Date Company Title Price (INR) Recos
Recent Research
07-Jan-13 Westlife
Development
Inching towards a billion dollar
entity; Visit Note
199 Not
Rated
19-Dec-12 Pantaloon
Retail
FDI, rejig to drive re-rating;
Visit Note
238 Hold
12-Nov-12 Pantaloon
Retail
Missing the festive cheer;
Result Update
198 Hold
> 50bn Between 10bn and 50 bn < 10bn
Buy Hold Reduce Total
Rating Interpretation
Buy appreciate more than 15% over a 12-month period
Hold appreciate up to 15% over a 12-month period
Reduce depreciate more than 5% over a 12-month period
Rating Expected to
14 Edelweiss Securities Limited
Retail
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