Titan Company Analysis

 

Industry profile  :  The Gems and Jewellery sector plays a significant role in the Indian economy, contributing around 6-7 per cent of the country’s GDP. It also employs over 2.5 million workers. One of the fastest growing sectors, it is extremely export oriented and labour intensive.  India’s exports 93 per cent of its cut and polished diamonds produced. exports of cut and polished diamonds rose from US$ 11.16 billion in FY 2004-05 to US$ 22.78 billion in FY 2016-17, thereby registering a compound annual growth rate (CAGR) of 6.13 per cent. Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion. The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote ‘Brand India’ in the international market.

Company profile  :  The company manufacturing jewellery with Tanishq brand. It is also in the business of spects and watches under various brands. Jewellry market is largely dominated by unorganized players. But Tanishq is market leader in organized segment. It is the world’s fifth largest wrist watch manufacturer and India’s leading producer of watches under various brands including the Titan, Fastrack, Sonata, Nebula, RAGA, Regalia, Octane & Xylys. Company is also making its moves into sunglass and frames under brand fastrack and titan eye +. Titan has entered into partnership with HP to venture into smart watches like FITBIT. Watches and Jewellry

Shareholding Pattern  :  6 Promoter entities including Tamilnadu Industrial Development Corporation limited, hold 52.91%. Mutual Funds Hold 2.74%. Financial Institutions hold 0.15%. Other govt entities hold 0.23%. Insurance companies hold 2.51%. 21.68%  held by Foreign investors. remaining 19% held by public out of which large stake is with Rakesh Jhunjhunwala and his wife Rekha jhunjhunwala.

Financials and ratios  : 

 2010 - 112011 - 122012 - 132013 - 142014 - 152015 - 162016 - 17
Revenue6,576.978,932.4910,213.4411,035.9811,973.7911,328.8912,679.31
Net profit430.42600.16725.18741.14823.07705.85761.86
NPM6.54%6.71%7.10%6.71%6.87%6.23%6%
EPS4.856.768.178.359.277.958.58
Book Value23116.3322.1328.4334.8339.5948.57
Dividend per Share251.752.102.102.302.202.60
Dividend Payout25.7825.8825.7025.1524.8027.67
ROE41.9741.3936.9029.3626.6120.0817.66
ROCE39.8339.3635.7628.5525.8819.4917.23
ROA11.5212.7712.3412.1314.0111.069.12
Asset turnover174.56188.06172.13178.74202.70176.65151.02
Debt to Equity0.01000.320.030.030

Future Prospects  :  Indians are mad for gold. Large part of Indian population is young and it is expected that they need jewelry for their marriage. After recent Demonetization and related restriction on gold buying, it is difficult for unorganized sector to make business. Whereas companies like Titan and TBZ, it is easy to make business. The company is well known with brands like sonata, fastrack , Titan eye plus, Tanishq. Smart watch segment is one big opportunity for company.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter