Result Update

February 4, 2019
Rating matrix
Rating : Buy Titan Company (TITIND) | 1030
Target : | 1140
Target Period : 12 months Jewellery glitters on strong festive season…
Potential Upside : 11%
 Titan Company reported a stellar performance with a strong beat
What’s changed? across all parameters. The festive quarter turned out to be one of the
Target Changed from | 1000 to | 1140 best for the jewellery segment
EPS FY20E Changed from | 20.8 to | 21.4
 Overall revenues grew 35% YoY to | 5871.5 crore (I-direct estimate:
EPS FY21E Changed from | 25.4 to | 26.0
Rating Unchanged
| 5239.4 crore). Supported by healthy festive season and successful
exchange programme, the jewellery division reported robust
Quarterly performance revenue growth of 37% YoY to | 4997.0 crore (highest ever quarterly
Q3FY19 Q3FY18 YoY (%) Q2FY19 QoQ (%) revenues). The watches segment sustained its revenue trajectory
Revenue 5,871.5 4,363.1 34.6 4,567.2 28.6 with growth of 18% YoY to | 646.6 crore. Revenues from eyewear
EBITDA* 591.2 422.4 40.0 468.9 26.1 division grew 43% YoY to | 129.5 crore
EBITDA (%)* 10.1 9.7 39 bps 10.3 -20 bps  Adjusting for IL&FS provision (| 70 crore), EBITDA margins for the
PAT* 411.1 281.6 46.0 301.1 36.5 quarter improved significantly by 160 bps YoY to 11.3% (I-direct
*Adjusted EBITDA for Q3FY19: | 661 crore, EBITDA margin: 11.3%. estimate 10.8%). On the segmental front, EBIT margin for jewellery
Adjusted PAT: | 480 crore segment expanded 290 bps YoY to 12.9% owing to higher gross
Key financials margins coupled with positive operating leverage kicking in. EBIT
(| crore) FY18 FY19E FY20E FY21E margins for the watches segment halved to 6.8% owing to significant
Net Sales 16,120 19,787 23,812 28,415 investment in marketing spends
EBITDA 1,645 2,117 2,715 3,296  Titan has made additional provision of | 70 crore (provided for | 29
Net Profit 1,130 1,473 1,898 2,307 crore in previous quarter) towards its investments in inter corporate
EPS (|) 12.7 16.6 21.4 26.0 deposits in the IL&FS group. Following the same, PAT grew 46% YoY
to | 411.2 crore (I-direct estimate: | 377.4 crore). If adjusted for the
Valuation Summary same, PAT growth was at ~70% YoY to | 480 crore
FY18 FY19E FY20E FY21E
Revenue growth accelerates; FY19E guidance maintained at 22%
P/E 80.9 62.1 48.2 39.6
The jewellery division registered healthy revenue growth of 37% YoY to
Target P/E 89.5 68.7 53.3 43.8
| 4997.0 crore. LTL sales growth for Tanishq came in at 27% YoY with
EV to EBITDA 55.3 42.9 33.4 27.4
grammage growth of 19%. Institutional order worth ~| 200 crore (gold
Price to book 18.0 14.8 12.3 10.3
coins) provided further growth impetus for the quarter. The management
RONW (%) 22.2 23.9 25.6 25.9
highlighted that sales growth in January was marginally below their
ROCE (%) 29.3 31.5 34.0 34.6 internal target (17-18% revenue growth) owing to certain advancement of
purchases during the company’s successful gold exchange programme
Stock Data
Particular Amount that ended in December. However, it expects stronger revenue trajectory
Market Capitalisation (| Crore) 91,442.0
in March with growth of 20-22% for Q4FY19. The management has
Debt (FY18) (| Crore) 50.9
maintained its revenue growth guidance of 22% for FY19E.
Cash (FY18) (| Crore) 629.1 Higher marketing spends impact margin for watches segment
EV (| Crore) 90,863.7 After five consecutive years of single digit revenue growth, watches
52 week H/L 1046 / 732 division saw a significant turnaround with ~17% revenue growth for
Equity Capital (| Crore) 88.8 9MFY19. While strong growth was seen across all channels, modern retail
Face Value (|) 1 formats, e-commerce performed exceedingly well. The division
strengthened its smart watches product portfolio with launch of products
Price performance like ‘Reflex Wav’, ‘SF Rush smart band’. Aggressive promotion for new
1M 3M 6M 12M product launches led to significant EBIT margin fall to 6.8% vs. 12.6% in
Titan Company 6.9 16.3 8.1 19.3 Q3FY18. The management expects to exit FY19E with ~15% EBIT margin.
PC Jeweller -16.8 2.7 -21.7 -85.2 Jewellery division continues to gain market share; maintain BUY!
TBZ -10.6 -4.6 -25.4 -52.3
On YTD basis, Titan has reported a splendid performance across all its
Research Analyst divisions with overall revenue growth of 24% YoY. The jewellery division
Bharat Chhoda
continued to gain market share by capitalising on larger opportunities
bharat.chhoda@icicisecurities.com such as wedding space and high value diamond studded jewellery. Titan
has a robust balance sheet with virtually debt free status and generating
Cheragh Sidhwa 30%+ RoCE. Factoring in the robust performance of Q3FY19, we tweak
cheragh.sidhwa@icicisecurities.com our estimates marginally upwards and pencil in revenues and earnings
CAGR of 21% and 27%, respectively, for FY18-21E. We reiterate our BUY
rating on the stock with a revised target price of | 1140 (44x FY21E EPS).

ICICI Securities Ltd | Retail Equity Research

Variance analysis
Q3FY19 Q3FY19E Q3FY18 YoY (%) Q2FY19 QoQ (%) Comments
Revenue 5871.5 5239.4 4363.1 34.6 4567.2 28.6 Robust revenue growth across all divisions

Raw Material Expense 4,366.0 3,921.7 3,220.4 35.6 3,269.2 33.6

Employee Expenses 249.1 254.2 221.0 12.7 244.3 2.0
Advertising Expenses 156.2 134.9 156.2 0.0 149.3 4.6
Other Expenses 509.0 363.1 343.1 48.3 435.5 16.9

EBITDA 591.2 565.5 422.4 40.0 468.9 26.1 Adjusted EBITDA: | 661 crore
EBITDA Margin (%) 10.1 10.8 9.7 39 bps 10.3 -20 bps Adjusted EBITDA margin: 11.3%
Depreciation 38.5 43.6 34.9 10.2 42.8 -10.1
Interest 15.7 13.8 10.9 43.5 13.5 16.2
Other Income 62.6 23.5 21.3 193.7 27.9 124.4

PBT before Exceptional item 599.7 531.6 397.9 50.7 440.5 36.1
Exceptional Item 0.0 0.0 0.0 0.0
PBT 599.7 531.6 397.9 50.7 440.5 36.1
Tax Outgo 188.5 154.2 115.9 62.6 137.7 36.9
PAT 411.1 377.4 281.6 46.0 301.1 36.5 Adjusted PAT grew ~70% YoY to | 480 crore

Key Metrics
Jewellery
Revenues (| Crore) 4,997.0 4,390.9 3,648.6 37.0 3,645.1 37.1 Retail sales growth: 34%, LTL: 27%

Higher gross margins, lower ad spends and reversal of inventory valuation

Segment EBIT Margin (%) 12.9 NA 10.0 290 bps 11.3 165 bps loss aided the EBIT margin

Watches
Revenues (| Crore) 641.2 578.3 542.6 18.2 678.8 -5.5 Strong growth continues on the back of new launches

Segment EBIT Margin (%) 6.8 NA 12.7 -588 bps 16.4 -965 bps Higher marketing spends impacted the margins negatively
Source: Company, ICICI Direct Research

Change in estimates
FY19E FY20E FY21E
(| Crore) Old New % Change Old New % Change Old New % Change
Revenue 19,520.0 19,787.0 1.4 23,348.9 23,811.7 2.0 27,815.9 28,415.1 2.2
EBITDA 2,108.2 2,117.2 0.4 2,661.8 2,714.5 2.0 3,226.6 3,296.2 2.2
EBITDA Margin (%) 10.8 10.7 -10 bps 11.4 11.4 0 bps 11.6 11.6 0 bps
PAT 1,441.0 1,473.4 2.2 1,848.7 1,897.9 2.7 2,255.4 2,307.4 2.3
EPS (|) 16.2 16.6 2.4 20.8 21.4 2.8 25.4 26.0 2.3
Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 2

 Conference call highlights
Jewellery division
 The management highlighted that the revenue lost in Q1FY19 has
now been largely recouped with sharp rebound in revenue growth in
Q2FY19 and Q3FY19
 The division witnessed healthy traction in both studded and plain
jewellery categories. Studded ratio came in at 25% (similar to the
previous year)
 Revenue growth in January came in at 17-18%, which was
marginally below the management’s internal targets. The reason for
the same was preponing of purchases during the company’s
successful gold exchange programme that started in mid-November
and ended in December. However, it expects stronger revenue
trajectory in March with growth of 20-22% for Q4FY19
 EBIT margin expanded significantly by 290 bps YoY to 12.9% on
account of a) higher gross margins, b) inventory valuation loss
reversal from the previous quarter (| 18 crore), c) lower advertising
spends in Q3FY19 as it was already incurred in previous quarter and
d) healthy revenue growth resulting in positive operating leverage.
 The company has added net 24 Tanishq stores (65,000 sq ft) in
9MFY19, taking total store count to 277. The management has
affirmed its guidance to add 40 stores by FY19E.
 Gold on exchange contributed 40% to the revenues in Q3FY19
 Other income was up ~3x owing to high cash balance due to higher
gold on lease.
Watches and other divisions
 The company, as part of its treasury operations, had invested | 145
crore in the IL&FS group in May and June in inter corporate deposits.
Consequently, Titan has made additional provision of | 70 crore in
the current quarter (provided for | 29 crore in previous quarter). Total
provisioning is now at | 99.0 crore
 The watches segment continued its healthy trajectory with revenue
growth of 18% YoY in Q3FY19, mainly due to strong sales in modern
retail formats and e-commerce channel and new collection launches
 New product launches resulted in high marketing spends. This, in
turn, negatively impacted margins. The management has guided for
15% EBIT margins for FY19E
 The division added five World of Titan (WOTs), nine Fastrack and
three Helios stores (1500 sq ft addition) in 9MFY19
 The eyewear division reported strong revenue growth of 40% YoY
with LTL sales growth for Titan Eye Plus at 13% in Q3FY19. The
company has increased assortment at more affordable price points
 Skinn (fragrance) remained the best seller in its category in
departmental chain stores and crossed the | 100-crore revenue mark.
It has 7-8% overall market share
 Mr. Bhaskar Bhat, current Managing Director, will retire from the
services of the Company on 30th September, 2019 and Mr. C. K.
Venkataraman (Venkat), currently the CEO of the Company's
Jewellery Division, will succeed Mr. Bhaskar Bhat as Managing
Director with effect from 1st October, 2019.

ICICI Securities Ltd | Retail Equity Research Page 3

 Company Analysis
The wedding segment accounts for ~60% of the jewellery market in India
(| 150,000 crore of total | 2,50,000 crore), of which Tanishq’s market
share is ~ 3%. Titan is aiming to increase its wedding jewellery share in
total revenue from 35% in FY18 to 50% by FY23. Titan’s sustained efforts
towards enhancing its share in the wedding jewellery space is proving to
be fruitful as it is growing at a much faster pace compared to non-bridal
jewellery. Since average ticket size for wedding jewellery is higher than
adornment jewellery, Titan’s aggressive foray into the wedding space is
expected to enhance asset turnover and return ratios, going forward.
We expect traction in the jewellery segment to continue on the back of
introduction of new collections with higher focus on the wedding
jewellery segment. In addition, with the rollout of GST, Titan has been a
beneficiary of the shift from unorganised to organised players with the
management indicating at market share gains in the quarter. We expect
Titan’s revenues to grow at a CAGR of 21% in FY18-21E mainly driven by
growth in the jewellery segment.
Exhibit 1: Revenue trend
30,000

23,812
28,415
19,787
24,000

16,120
| crore

13,261
18,000
11,276

12,000

5,871
4,567
4,451
4,363
4,067
3,930
3,599

3,582
3,398

4,107
2,803
2,680
2,391

6,000

-
Q4F…

Q1F…
Q2F…
Q3F…
Q4F…

Q3F…
Q4F…

Q1F…
Q2F…
Q3F…
Q3F…

Q1F…
Q2F…

FY19E
FY20E
FY21E
FY16

FY17

FY18

Source: Company, ICICI Direct Research

Exhibit 2: Divisional performance (revenue)

23,580
19,650
25,000
16,240

20,000
13,257
10,596

15,000
8,621

10,000
4,997
3,649

3,643
3,645
3,425

3,358
Q3FY17 513 3,304

3,162
2,825

2,824
2,477
Q1FY17 5002,151

2,132
Q2FY17 525 2,007

Q4FY17 5052,955
1,847

2,061
1,977

5,000
679
641
596
578
543
519

492
449

-
Q4FY16

Q1FY18
Q2FY18
Q3FY18
Q4FY18

Q1FY19
Q2FY19
Q3FY19
FY19E
FY20E
FY21E
FY16

FY17

FY18

Watches Jewellery

Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 4

 %

-
20
40
60
80
Q4FY15

(20) (15)
9
FY15
Q1FY16

(11)
Q2FY16

20
Q3FY16

1
Q4FY16
FY16

(9)

Source: Company, ICICI Direct Research

4
Q1FY17

1
Exhibit 3: Jewellery segment growth

Q2FY17

17
Q3FY17
60

Q4FY17
23

FY17
59

Q1FY18
41

Q2FY18
10

Q3FY18

ICICI Securities Ltd | Retail Equity Research

14

Q4FY18
25

FY18
| crore
6

% Q1FY19
29

Q2FY19

-
8

6
7
9
10
11
13
12
37

Q3FY19

500
1,000
1,500
2,000
2,500
Q1FY16

8.2
Q1FY15 177
Q2FY16

7.5
Q2FY15 240
Q3FY15 191 Q3FY16

Exhibit 6: Net profit trend

Q4FY15 215 Q4FY16

9.0 8.7
FY15 823 %
-

Exhibit 5: EBITDA margin trend

FY16

8.3
Q1FY16 151
10
15
20

Source: Company, ICICI Direct Research

Source: Company, ICICI Direct Research
(5)

(15)
(10)

Q2FY16 146 Q1FY17

10.2
2

Q3FY16 226 Q2FY17 Q4FY15

9.9
7

Q4FY16 187 FY15

Q3FY17
8.8
10

FY16 675 Q1FY16

5

Q4FY17 Q2FY16
7.1
Q1FY17 121
9

Q2FY17 166 FY17 Q3FY16

Q4FY16
(12)

Q3FY17 233 Q1FY18

8.7 9.0
3

Q4FY17 179 FY16

3

Source: Company, ICICI Direct Research

Exhibit 4: Watch segment growth

Q2FY18 Q1FY17
11.8

FY17 711

EBITDA Margin
Q2FY17
(5)

Q3FY18
9.7

Q1FY18 239
6

Q3FY17
Q2FY18 278 Q4FY18
10.6
13

Q4FY17
Q3FY18 282 FY18 FY17
10.2

Q4FY18 306
4 4

Q1FY19 Q1FY18
10.8

FY18 1,130
10

Q2FY18
Q1FY19 329 Q2FY19
6

Q3FY18
Q2FY19 303 Q3FY19
10.310.1

Q4FY18
(3)

Q3FY19 411
3

FY19E FY18
10.7

FY19E 1,473
15

FY20E Q1FY19

Page 5
FY20E 1,898 Q2FY19
FY21E 2,307 FY21E
11.411.6
17 18

Q3FY19
 Valuation
On a YTD basis, Titan reported a splendid performance across all its
divisions with overall revenue growth of 24% YoY. The jewellery division
has continued to gain market share by capitalising on larger opportunities
such as wedding space and high value diamond studded jewellery. Titan
has a robust balance sheet having virtually debt free status and
generating 30%+ RoCE. Factoring in the robust performance of Q3FY19,
we tweak our estimates marginally upwards and pencil in revenues and
earnings CAGR of 21% and 27%, respectively, for FY18-21E. We reiterate
our BUY rating on the stock with a revised target price of | 1140 (44x
FY21E EPS).

Exhibit 7: Valuations
Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE
(| cr) (%) (|) (%) (x) (x) (%) (%)
FY18 16,119.8 21.6 12.7 58.8 80.9 55.3 22.2 29.3
FY19E 19,787.0 22.7 16.6 30.4 62.1 42.9 23.9 31.5
FY20E 23,811.7 20.3 21.4 28.8 48.2 33.4 25.6 34.0
FY21E 28,415.1 19.3 26.0 21.6 39.6 27.4 25.9 34.6
Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 6

Recommendation history vs. consensus estimate
1,220 100.0
90.0
1,020 80.0
820 70.0
60.0
620 50.0
(|)

(%)
40.0
420 30.0
220 20.0
10.0
20 Nov-16 0.0
Feb-16

Mar-16

May-16

Jul-16

Oct-16

Jan-17

Feb-17

Apr-17

May-17

Jul-17

Sep-17

Oct-17

Dec-17

Jan-18

Mar-18

Apr-18

Jun-18

Jul-18

Sep-18

Oct-18

Dec-18

Feb-19
Aug-16

Price Idirect target Consensus Target Mean % Consensus with Buy

Source: Bloomberg, Company, ICICI Direct Research

Key events
Date Event
Sep-10 Jewellery segment crosses | 1,000 crore (quarterly sales) mark
Nov-10 Jewellery segment witnesses 50% YoY growth and also crosses the | 1,500 (quarterly sales) mark
Feb-11 Weak watch segment margin (owing to one-time provision) leads blended margin to fall 110 bps YoY to 6.4%
Dec-11 Pace of revenue growth dips to 20-25% range owing to a slowdown in jewellery segment
Jan-12 The government changes import duty on gold from a flat | 300/ 10 gm to 2% while gold prices go up to that effect, jewellery demand remains unchanged
Aug-12 Jewellery segment reports negative growth for the first time in 27 quarters
Dec-12 Revival in jewellery segment - posts 40% YoY growth in revenues to | 2,515 crore
Jun-13 Jewellery segment posts healthy growth of 47% to | 2,600 crore
Sep-13 Jewellery stocks take a beating owing to the 80:20 rule imposed by the government for gold imports
Feb-14 Government allows the company to hedge gold in international markets

Mar-14 Government decides to allow five Indian private sector banks to import gold within prescribed limits, thereby easing concerns relating to sourcing of gold
May-14 RBI allows premium trading houses to import gold (under 80:20 rule) and also re-allows gold on lease
Dec-15 Launch of Titan JUXT Smart watches
Tanishq launches ‘Subham Collection' of heritage gold jewellery. It also introduces differentiated wedding line and colour stones, ‘Nakashi’. Gold plus introduced a
Dec-16 new ‘wedding’ collection, ‘Apsara’ collection and ‘Akriti’ collection of Diamantine jewellery in Q3FY17
Titan continues to expand its smart watch portfolio by launching four brands (Juxt, Juxt pro, Sonata Act, Fastrack Activity Tracker Band). Tanishq launches a
Mar-17 wedding jewellery collection 'RIVAAH'
Source: Company, ICICI Direct Research

Top 10 Shareholders Shareholding Pattern

Rank Name Last Filing Date %O/S Position (m) Change (m) (in %) Dec-17 Mar-18 Jun-18 Sep-18 Dec-18
1 Tamilnadu Industrial Development Corporation, Ltd. 31-Dec-18 27.88 247.5 0.0 Promoter 52.9 52.9 52.9 52.9 52.9
2 Tata Group of Companies 31-Dec-18 24.98 221.7 0.0 FII 21.3 21.3 21.1 20.1 19.1
3 Jhunjhunwala (Rakesh Radheshyam) 31-Dec-18 5.78 51.3 -0.4 DII 5.7 6.1 6.5 7.6 8.2
4 Matthews International Capital Management, L.L.C. 31-Mar-18 2.10 18.6 -2.1 Others 20.2 19.7 19.5 19.4 19.8
5 Jhunjhunwala (Rekha Rakesh) 31-Dec-18 1.30 11.6 0.0
6 The Vanguard Group, Inc. 31-Dec-18 1.23 10.9 -0.1
7 BlackRock Institutional Trust Company, N.A. 31-Dec-18 1.12 10.0 0.1
8 Life Insurance Corporation of India 31-Dec-18 1.10 9.8 -4.7
9 ICICI Prudential Asset Management Co. Ltd. 31-Dec-18 0.90 8.0 0.0
10 SBI Funds Management Pvt. Ltd. 31-Dec-18 0.82 7.3 -0.2
Source: Reuters, ICICI Direct Research
Recent Activity
Buys Sells
Investor name Value Shares Investor name Value Shares
Van Eck Associates Corporation 16.74 1.51 Life Insurance Corporation of India -63.11 -4.72
Kotak Mahindra Asset Management Company Ltd. 13.69 1.02 Fidelity Management & Research Company -36.05 -2.7
Allianz Global Investors GmbH 4.77 0.37 Baron Capital Management, Inc. -27.25 -2.0
Axis Asset Management Company Limited 3.99 0.30 Goldman Sachs Asset Management (US) -6.97 -0.6
Tredje AP Fonden 3.81 0.30 APG Asset Management -6.30 -0.49
Source: Reuters, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 7

Financial summary
Profit and loss statement | Crore Cash flow statement | Crore
(Year-end March) FY18 FY19E FY20E FY21E (Year-end March) FY18 FY19E FY20E FY21E
Total operating Income 16,119.8 19,787.0 23,811.7 28,415.1 PAT 1,130.1 1,473.4 1,897.9 2,307.4
Growth (%) 21.6 22.7 20.3 19.3 Add: Depreciation 131.4 158.6 180.2 201.3
Raw Material Expenses 11,686.2 14,286.2 17,001.6 20,572.5 (Inc)/dec in Current Assets -1,443.9 -1,332.6 -1,540.9 -1,836.7
Employee Expenses 885.1 1,028.9 1,262.0 1,449.2 Inc/(dec) in CL and Provisions 205.2 412.8 576.6 720.7
Mfg, Admin & selling Exps 1,903.8 2,354.7 2,833.6 3,097.2 Others 0.0 0.0 0.0 0.0
Total Operating Expenditure 14,475.1 17,669.8 21,097.2 25,118.9 CF from operating activities 22.8 712.2 1,113.8 1,392.8
EBITDA 1,644.7 2,117.2 2,714.5 3,296.2 (Inc)/dec in Investments 382.7 -20.5 -27.7 -21.4
Growth (%) 42.3 28.7 28.2 21.4 (Inc)/dec in Fixed Assets -373.5 -253.5 -257.0 -237.9
Depreciation 131.4 158.6 180.2 201.3 (Inc)/dec in CWIP 108.7 13.0 0.0 9.1
Interest 52.9 48.3 44.9 43.3 Others -50.3 0.0 0.0 0.0
Other Income 88.9 146.6 153.9 161.6 CF from investing activities 67.6 -261.1 -284.7 -250.2
PBT 1,549.2 2,056.9 2,643.4 3,213.2 Issue/(Buy back) of Equity 0.0 0.0 0.0 0.0
Exception items 16.7 0.0 0.0 0.0 Inc/(dec) in loan funds 79.0 -28.1 -5.1 -4.6
Total Tax 427.9 596.5 756.0 915.8 Others -330.4 -392.9 -660.7 -803.5
Share of JV/Minority int 25.4 13.0 10.5 10.0 CF from financing activities -251.4 -421.0 -665.8 -808.1
PAT 1,130.1 1,473.4 1,897.9 2,307.4 Net Cash flow -161.0 30.2 163.2 334.5
Growth (%) 58.8 30.4 28.8 21.6 Opening Cash 778.9 617.9 648.1 811.3
EPS (|) 12.7 16.6 21.4 26.0 Closing Cash 617.9 648.1 811.3 1,145.8
Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

Balance sheet | Crore Key ratios

(Year-end March) FY18 FY19E FY20E FY21E (Year-end March) FY18 FY19E FY20E FY21E
Liabilities Per share data (|)
Equity Capital 88.8 88.8 88.8 88.8 EPS 12.7 16.6 21.4 26.0
Reserve and Surplus 5,001.1 6,081.7 7,318.8 8,822.8 Cash EPS 13.9 18.2 23.3 28.1
Total Shareholders funds 5,089.9 6,170.4 7,407.6 8,911.5 BV 57.3 69.5 83.4 100.4
Total Debt 79.0 50.9 45.8 41.2 DPS 2.6 3.8 6.4 7.8
Deferred Tax Liability (32.9) (32.9) (32.9) (32.9) Cash Per Share 7.0 7.3 9.1 12.9
Other long term liabilities (1.8) (1.8) (1.9) (1.9) Operating Ratios
Total Liabilities 5,134.2 6,186.6 7,418.6 8,918.0 EBITDA Margin (%) 10.2 10.7 11.4 11.6
Assets PBT Margin (%) 9.6 10.4 11.1 11.3
Gross Block 1,558.1 1,811.6 2,068.7 2,306.5 PAT Margin (%) 6.9 7.4 7.9 8.1
Less: Accu Depreciation 230.0 388.6 568.8 770.1 Inventory days 134.2 130.0 128.0 128.0
Net Block 1,328.1 1,423.0 1,499.9 1,536.4 Debtor days 6.7 6.5 6.2 6.2
Capital WIP 43.4 30.4 30.4 21.3 Creditor days 56.4 58.0 58.0 58.0
Goodwill on Consolidation 123.0 123.0 123.0 123.0 Return Ratios (%)
Total Fixed Assets 1,494.5 1,576.4 1,653.2 1,680.7 RoE 22.2 23.9 25.6 25.9
Investments 58.7 79.2 106.9 128.3 RoCE 29.3 31.5 34.0 34.6
Inventory 5,924.8 7,047.4 8,350.4 9,964.7 RoIC 29.9 32.0 34.6 35.2
Debtors 295.7 352.4 404.5 482.7 Valuation Ratios (x)
Loans and Advances 994.4 1,147.6 1,333.5 1,477.6 P/E 80.9 62.1 48.2 39.6
Other Current Assets - - - - EV / EBITDA 55.3 42.9 33.4 27.4
Cash 617.9 648.1 811.3 1,145.8 EV / Net Sales 5.6 4.6 3.8 3.2
Total Current Assets 7,832.8 9,195.5 10,899.6 13,070.8 Market Cap / Sales 5.7 4.6 3.8 3.2
Creditors 2,489.8 3,144.2 3,783.8 4,515.3 Price to Book Value 18.0 14.8 12.3 10.3
Other Current Liabilities 1,723.2 1,484.0 1,428.7 1,420.8 Solvency Ratios
Provisions 141.1 138.5 130.9 128.0 Debt/EBITDA 0.0 0.0 0.0 0.0
Total Current Liabilities 4,354.0 4,766.8 5,343.3 6,064.0 Debt / Equity 0.0 0.0 0.0 0.0
Net Current Assets 3,478.8 4,428.8 5,556.3 7,006.8 Current Ratio 1.8 1.9 2.0 2.2
Others Non Current Assets 102.2 102.2 102.2 102.2 Quick Ratio 0.4 0.5 0.5 0.5
Application of Funds 5,134.2 6,186.6 7,418.6 8,918.0 Source: Company, ICICI Direct Research
Source: Company, ICICI Direct Research

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ICICI Direct Research coverage universe (Retail)
CMP M Cap EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%)
Sector / Company (|) TP(|) Rating (| Cr) FY18 FY19E FY20E FY18 FY19EFY20E FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E
Bata India 1,160 1,160 Buy 14,896 17.4 23.5 28.5 66.6 49.4 40.7 35.4 28.4 23.2 19.9 22.1 23.7 15.1 17.8 19.0
Shoppers Stop (SHOSTO) 505 545 Hold 4,420 1.3 10.3 12.9 382.9 48.8 39.2 21.4 17.7 14.8 9.6 12.3 14.4 1.2 9.0 10.4
Titan Company (TITIND) 1,030 1,140 Buy 91,442 12.7 16.6 21.4 80.9 62.1 48.2 55.3 42.9 33.4 29.3 31.5 34.0 22.2 23.9 25.6
Trent 355 410 Buy 11,828 2.6 4.8 6.9 135.5 73.4 51.7 55.8 41.8 32.9 10.0 12.0 14.7 5.5 9.5 12.5
ABFRL 210 250 Buy 16,168 1.5 2.2 3.4 137.6 97.7 62.1 34.9 27.9 22.8 8.5 11.4 13.5 10.8 13.2 17.2

Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 9

RATING RATIONALE
ICICI Direct Research endeavours to provide objective opinions and recommendations. ICICI Direct Research
assigns ratings to its stocks according to their notional target price vs. current market price and then
categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified
and the notional target price is defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICI Direct Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com

ICICI Securities Ltd | Retail Equity Research Page 10

ANALYST CERTIFICATION
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an officer, director or employee of the companies mentioned in the report.
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ICICI Securities Ltd | Retail Equity Research Page 11