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Emkay Research is also available on www.emkayglobal.com and Bloomberg EMKAY<GO>. Please refer to the last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors, Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore.

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CMP: Rs 997 as of (June 9, 2020)

TP: Rs 1,100 (■) 12 months

Rating: BUY (■) Upside: 10.3 %

India Equity Research | Retail

June 9, 2020

Result Update

Titan Company Refer to important disclosures at the end of this report

Better placed to gain share

Change in Estimates

EPS Chg FY21E/FY22E (%) (21)/(6)

Target Price change (%) -

Target Period (Months) 12

Previous Reco BUY

Emkay vs Consensus

EPS Estimates

FY21E FY22E

Emkay 15.4 22.5

Consensus 16.5 23.0

Mean Consensus TP (12M) Rs 987

Stock Details

Bloomberg Code TTAN IN

Face Value (Rs) 1

Shares outstanding (mn) 888

52 Week H/L 1,390 / 720

M Cap (Rs bn/USD bn) 885 / 11.71

Daily Avg Volume (nos.) 43,61,912

Daily Avg Turnover (US$ mn) 53.4

Shareholding Pattern Mar '20

Promoters 52.9%

FIIs 17.7%

DIIs 10.9%

Public and Others 18.5%

Price Performance

(%) 1M 3M 6M 12M

Absolute 20 (17) (15) (21)

Rel. to Nifty 10 (14) 1 (7)

Titan’s profitability was better than expectations and was driven by stronger margins in

jewelry and watches divisions. Excluding IND-AS and one-offs, comparable EBITDA at

Rs5.5bn was 18% ahead of our estimates and was marginally lower YoY.

Management said that nearly 75% of its jewelry store network resumed operations and is

expected to reach 90% by June-end. The pace of recovery has been encouraging at ~80%

in jewelry and over 40% in watches, although this is for the very few stores, which were

operational for around four weeks in May.

Q1 will witness a sharp decline (zero sales in April, 10-15% in May and 30-40% expected

in June), impacting margins. However, management’s aggressive cost-saving initiatives

and the lower fixed cost structure may keep margins intact for FY21.

Titan seems best placed to gain vs. competition, with a stronger rollout of online initiatives

and wider portfolio. We reduce FY21/22E EPS by 21%/6% due to the delayed store

opening. Maintain Buy/OW in EAP, with TP of Rs1,100, based on 45x Jun-22 EPS.

Relative price chart

Source: Bloomberg This report is solely produced by Emkay Global. The following person(s) are responsible for the production of the recommendation:

Ashit Desai

[email protected]

+91 22 6612 1340

Devanshu Bansal

[email protected]

+91 22 6612 1385

-20

-12

-4

4

12

20

800

915

1030

1145

1260

1375

Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20 May-20

%Rs

Titan Company (LHS) Rel to Nifty (RHS)

Revenue fall in line at 5%, pace of recovery encouraging: Jewelry fell by 6% and Eyewear

by 17%, while watches grew ~5% impacted by the decline in March. In Jan/Feb’20, the jewelry

business grew 16.5% YoY, eyewear was flat and watches grew 15.7%. For Q1FY21, April

has recorded zero sales as stores were closed, May sales were 10-15% of planned sales and

June sales are expected to be 30-40% of planned sales. The pace of recovery has been

encouraging as average daily sales have recovered to ~80% in Tanishq and ~45% in watches

and eyewear segments, although this was only for the few stores that were open for ~4 weeks.

Titan expects growth to return by Q4FY21. Management initiatives on safety measures

(“safest store in town”), aggressive rollout of omni and remote selling features and wider

portfolio with lower priced offerings are likely to accelerate share gains from competition.

Margins improve despite lower sales; to drive cost and working capital reduction in

FY21: Gross margins (excluding the hedging loss of Rs370mn in Q4FY19) were up 200bps,

driven by a better studded mix and lower promotion spends. Excluding one-offs (Rs460mn

provision and Rs340mn employee incentives) and IND-AS impact, comparable EBITDA fell

to Rs5.5bn vs. Rs5.7bn. Staff costs declined 3%, whereas ad spends were down 33%.

Management highlighted a significant focus on costs savings across rentals, ad spends and

fixed costs and also reduction in working capital.

Better placed to gain share; maintain Buy: Titan seems best placed to gain vs. competition,

with a stronger rollout of online initiatives and wider portfolio. We reduce FY21/22 EPS by

21%/6% due to the delayed opening. Maintain Buy/OW in EAP, with a TP of Rs1,100, based

on 45x Jun-22 EPS.

Please see our sector model portfolio (Emkay Alpha Portfolio): Consumer Goods & Retail (Page 10)

Financial Snapshot (Standalone)

(Rs mn) FY19 FY20 FY21E FY22E FY23E

Revenue 1,90,700 2,00,096 1,67,393 2,33,604 2,71,603

EBITDA 20,022 24,177 21,059 29,752 34,831

EBITDA Margin (%) 10.5 12.1 12.6 12.7 12.8

APAT 15,292 15,176 13,666 20,018 23,606

EPS (Rs) 17.2 17.1 15.4 22.5 26.6

EPS (% chg) 24.3 (0.8) (10.0) 46.5 17.9

ROE (%) 26.9 22.7 17.9 22.7 22.6

P/E (x) 57.9 58.3 64.8 44.2 37.5

EV/EBITDA (x) 43.7 36.3 41.2 29.1 24.7

P/BV (x) 14.3 12.3 10.9 9.3 7.8

Source: Company, Emkay Research

http://www.emkayglobal.com/

https://www.euromoney.com/research-and-awards/surveys-and-awards/asiamoney-brokers-poll/vote-now

Titan Company (TTAN IN) India Equity Research | Result Update


June 9, 2020 | 2

Story in Charts

Exhibit 1: Jewelry sales and margins impacted by shutdown in March; Jan-Feb sales grew 17%


Exhibit 2: High gold prices led to a decline in grammage


Exhibit 3: Sales growth for watches was healthy in Jan-Feb


Exhibit 4: Volume growth of watches impacted by shutdown


Exhibit 5: Acceleration in expansion of Tanishq

Source: Emkay Research, Company

Exhibit 6: Titan’s one-year forward PE band chart

Source: Emkay Research, Company

13%

6%

29%

37%

21%

13%

-2%

11%17%

-6%-7%

0%

7%

14%

21%

28%

35%

42%

4Q

FY

18

1Q

FY

19

2Q

FY

19

3Q

FY

19

4Q

FY

19

1Q

FY

20

2Q

FY

20

3Q

FY

20

Jan

/Feb

4Q

FY

20

Jewellery YoY sales growth

6%

-3%

24%20%

15%

6%

-14%

-5%

-20% -20%

-10%

0%

10%

20%

30%

(30,000)

(15,000)

-

15,000

30,000

45,000

4Q

FY

18

1Q

FY

19

2Q

FY

19

3Q

FY

19

4Q

FY

19

1Q

FY

20

2Q

FY

20

3Q

FY

20

4Q

FY

20

Gold price (LHS) Grammage growth (RHS)

6%

-2%

15%17% 19%

7%

20%

6%

-2%

16%

5%

-5%

0%

5%

10%

15%

20%

25%

3Q

FY

18

4Q

FY

18

1Q

FY

19

2Q

FY

19

3Q

FY

19

4Q

FY

19

1Q

FY

20

2Q

FY

20

3Q

FY

20

Jan

/Feb

4Q

FY

20

Watches YoY sales growth

-1%

10%

21%16%

0%

13%

-1%

-10%-5%

-15%-10%-5%0%5%

10%15%20%25%

4Q

FY

18

1Q

FY

19

2Q

FY

19

3Q

FY

19

4Q

FY

19

1Q

FY

20

2Q

FY

20

3Q

FY

20

4Q

FY

20

Volume growth (watches)

253 262 267 277 287 299 308 321 327

1.01 1.02 1.04 1.07 1.09 1.12 1.16 1.20 1.24

0.40

0.60

0.80

1.00

1.20

1.40

100

150

200

250

300

350

4Q

FY

18

1Q

FY

19

2Q

FY

19

3Q

FY

19

4Q

FY

19

1Q

FY

20

2Q

FY

20

3Q

FY

20

3Q

FY

20

Tanishq stores -LHS Retail space (sq ft mn) - RHS

0200400600800

10001200140016001800

Jun

-12

Se

p-1

2D

ec-1

2M

ar-

13

Jun

-13

Se

p-1

3D

ec-1

3M

ar-

14

Jun

-14

Se

p-1

4D

ec-1

4M

ar-

15

Jun

-15

Se

p-1

5D

ec-1

5M

ar-

16

Jun

-16

Se

p-1

6D

ec-1

6M

ar-

17

Jun

-17

Se

p-1

7D

ec-1

7M

ar-

18

Jun

-18

Se

p-1

8D

ec-1

8M

ar-

19

Jun

-19

Se

p-1

9D

ec-1

9M

ar-

20

Jun

-20

Titan-P/E band

35x

20x

50x

65x




June 9, 2020 | 3

Exhibit 7: Retail sales largely impacted by March


Exhibit 8: Sales recovery rate has been encouraging


Exhibit 9: Recovery in watches segments; LFS and trade has been slow whereas other have seen a good recovery


Exhibit 10: Similar trends in eyewear; 412 stores have opened out of 584





June 9, 2020 | 4

Exhibit 11: Actual vs. Estimates (Q3FY20)

Rs mn Actual Estimates % variation

Comment Emkay Consensus Emkay Consensus

Revenues 44,288 44,385 43,885 -0.2% 0.9% Revenue in line

EBITDA 6,037 5,108 4,431 18.2% 36.2% EBITDA margins stronger on

EBITDA Margin (%) 13.6% 11.5% 10.1% 212 353 Better revenue mix and lower discounts helped margins

APAT 3,568 3,181 2,847 12.1% 25.3% PAT was better than/our street expectations


Exhibit 12: Changes in estimates

Y/E, Mar (Rs mn) FY21E FY22E FY23E

Earlier Revised % Change Earlier Revised % Change Introduced

Revenues 2,21,222 1,67,393 -24.3 2,61,271 2,33,604 -10.6 2,71,603

EBITDA 23,764 19,295 -18.8 29,072 27,635 -4.9 32,354

EBITDA Margin (%) 10.7 11.5 80 bps 11.1 11.8 70 bps 11.9

APAT 17,181 13,666 -20.5 21,273 20,018 -5.9 23,606

EPS 19.4 15.4 -20.5 24.0 22.5 -5.9 26.6


Exhibit 13: Quarterly performance (standalone)

Y/E, Mar (Rs m) 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 YoY (%) QoQ (%) FY19 FY20 YoY (%)

Revenue 46,721 49,397 44,350 62,062 44,288 -5.2 -28.6 1,90,700 2,00,096 4.9

Expenditure 42,165 43,744 39,218 54,706 38,251 -9.3 -30.1 1,70,678 1,75,919 3.1

Consumption of RM 34,004 36,135 31,378 46,627 30,978 -8.9 -33.6 1,39,872 1,45,118 3.8

as % of sales 72.8% 73.2% 70.8% 75.1% 69.9% 73.3% 72.5%

Employee Cost 2,522 2,454 2,657 2,851 2,440 -3.3 -14.4 8,788 10,401 18.4

as % of sales 5.4% 5.0% 6.0% 4.6% 5.5% 4.6% 5.2%

Advertising & SP 1,125 1,340 1,254 1,412 759 -32.5 -46.2 5,226 4,767 -8.8

as % of sales 2.4% 2.7% 2.8% 2.3% 1.7% 2.7% 2.4%

Other expenditure 4,513 3,814 3,929 3,816 4,074 -9.7 6.8 16,792 15,633 -6.9

as % of sales 9.7% 7.7% 8.9% 6.1% 9.2% 8.8% 7.8%

EBITDA 4,556 5,653 5,132 7,356 6,037 32.5 -17.9 20,022 24,177 20.8

Depreciation 335 681 737 777 902 169.4 16.0 1,389 3,097 123.0

EBIT 4,221 4,972 4,395 6,579 5,135 21.6 -22.0 18,633 21,080 13.1

Other Income 551 560 307 197 401 -27.3 103.9 1,785 1,464 -18.0

Interest 122 303 408 405 379 210.5 -6.3 445 1,495 236.3

PBT 4,650 5,229 4,294 6,371 5,156 10.9 -19.1 19,974 21,050 5.4

Total Tax 1,004 1,521 1,093 1,671 1,588 58.2 -5.0 5,530 5,873 6.2

PAT after MI 3,646 3,707 3,202 4,699 3,568 -2.1 -24.1 14,444 15,176 5.1

Extra ordinary items 700 0 0 0 0 700 0

Reported PAT 2,946 3,707 3,202 4,699 3,568 21.1 -24.1 13,744 15,176 10.4

Adjusted PAT 3,816 3,707 3,202 4,700 3,568 -6.5 -24.1 15,304 15,176 -0.8

Adjusted EPS 3.3 4.2 3.6 5.3 4.0 21.1 -24.1 16.3 17.1 5.1

Margins (%) (bps) (bps) (bps)

EBIDTA 9.8 11.4 11.6 11.9 13.6 390 180 10.5 12.1 160

EBIT 9.0 10.1 9.9 10.6 11.6 260 100 9.8 10.5 80

EBT 10.0 10.6 9.7 10.3 11.6 170 140 10.5 10.5 0

PAT 8.2 7.5 7.2 7.6 8.1 -10 50 8.0 7.6 -40

Effective Tax rate 21.6 29.1 25.4 26.2 30.8 920 460 27.7 27.9 20





June 9, 2020 | 5

Exhibit 14: Segment performance

Revenue (Rs mn) 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 YoY (%) QoQ (%) FY19 FY20 YoY (%)

Watches 5,311 7,146 7,187 6,253 5,568 -2.4 -13.0 24,409 26,155 7.2

Jewellery 39,855 40,474 35,278 54,087 37,544 10.6 53.3 1,60,296 1,67,382 4.4

Eyewear 1,304 1,488 1,542 1,333 1,077 2.9 -13.6 5,114 5,440 6.4

Others 369 363 440 494 415 32.6 12.3 1,334 1,711 28.2

Corporate 434 486 210 92 85 -73.9 -56.0 1,331 872 -34.5

Total 47,272 49,956 44,657 62,259 44,688 8.6 39.4 1,92,485 2,01,561 4.7

EBIT (Rs mn)

Watches 290 1,277 1,134 521 722 -4.1 -54.0 3,164 3,653 15.5

Jewellery 5,121 4,420 3,841 7,013 5,339 7.8 82.6 19,480 20,613 5.8

Eyewear -17 -114 20 -67 18 358.9 -436.7 (24) (143) 502.1

Others -171 -185 -98 -92 -209 -19.3 -6.5 (581) (584) 0.5

Total 5,223 5,397 4,897 7,375 5,870 6.6 50.6 22,039 23,539 6.8

Margin (%)

Watches 5.5 17.9 15.8 8.3 13.0 -10 -740 13.0 14.0 100

Jewellery 12.8 10.9 10.9 13.0 14.2 -30 210 12.2 12.3 20

Eyewear (1.3) (7.7) 1.3 (5.0) 1.7 -390 -630 (0.5) (2.6) -220

Others (46.4) (51.1) (22.3) (18.6) (50.3) 1,200 370 (43.6) (34.1) 940

Total 11.0 10.8 11.0 11.8 13.1 -20 90 11.4 11.7 20


Exhibit 15: Quarterly snapshot of retail growth

Particulars 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20

World of Titan 9% 6% -1% 11% -7%

Tanishq 20% 16% 7% 15% -4%

Titan Eye+ 21% 20% 35% 11% -8%

Fastrack 8% 4% -7% 1% -10%

Helios 14% 8% 9% 23% 10%

Large format stores in watches 20% 16% 6% 8% -9%


Exhibit 16: Quarterly snapshot of LTL growth

Particulars 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20

World of Titan 7% 6% -3% 11% -9%

Tanishq 14% 10% 2% 9% -9%

Titan Eye+ 14% 14% 28% 3% -16%

Fastrack 2% 1% -12% -4% -12%

Helios 6% 5% 1% 12% -3%

Large format stores in watches 16% 12% 1% 3% 5%

Source: Company, Bloomberg

Exhibit 17: Peer comparison

Companies Price (Rs)

Mcap (Rs bn)

Reco Target

Price (Rs)

EPS (Rs) P/E (x) EV / EBITDA (x)

FY20E FY21E FY22E FY20E FY21E FY22E FY20E FY21E FY22E

Titan Company 997 885 Buy 1,100 17.1 15.4 22.5 58.3 64.8 44.2 36.3 41.2 29.1

Jubilant FoodWorks 1,667 220 Buy 1,550 24.1 22.1 34.9 69.0 75.4 47.8 24.2 26.1 19.6

Page Industries 19,257 215 Hold 18,200 337.6 359.4 454.8 57.0 53.6 42.3 37.2 34.7 27.8

ABFRL 132 102 Buy 150 (1.9) -0.5 1.1 -70.5 -257.4 125.0 10.4 11.0 8.8

Shoppers Stop 199 18 Hold 225 3.4 2.8 7.7 59.5 70.3 25.8 2.7 2.3 2.0





June 9, 2020 | 6

Other Key Highlights

Q1FY20 Outlook: April recorded zero sales as all stores were shut. Sales in May were

~10-15% of the planned revenues. Titan expects June revenues to be ~30-40%. Titan

indicated that its average daily sales have recovered to ~80% in Tanishq for the stores that

were operational for 4 weeks and ~45% in other major segments. Titan indicated that while

sales are recovering but Q1FY21 is going to be heavily impacted by Covid-19 due to the

loss of sales in April and May. However, it expects YoY growth to return in Q4FY21.

As of now, Titan has been able to open 1,400 stores out of the total 1,800 stores (~75%).

It added 41 stores in FY20 and plans to add ~25 in FY21 and thereafter 40+.

Titan indicated that its ‘encircle’ data of ~20mn customers remains a key differentiator. Titan

also indicated that its marketing teams are already focusing on capturing lost sales from

missed milestones with the help of this database.

Margins were better in Q4FY20 due to an improved revenue mix (higher studded mix) and

lower discounts to customers.

Rental negotiations are going on with landlords. Most stores are on high streets, of which

some have got significant waivers. Discussions with mall stores still going on.

Working capital increase was on account of the rising proportion of gold exchange sales

and outright purchases at ~50% now, with gold on lease proportion going down to 39%.

Management is trying to address this through various measures.

Titan indicated that the diamond industry is in stress due to lower exports and unsold

inventory. While prices for bigger diamonds (like Solitaire) can come down but pricing of

small diamonds shall not decline much.

Golden harvest sales were ~21% in FY20 vs. 17% in FY18 and 20% in FY19. Sales through

Gold Exchange were ~33% vs. 28% in FY18 and 32% in FY19. Wedding contribution to

the overall sales was 23% vs. 21% in FY18 and 21% in FY19.




June 9, 2020 | 7

Key Financials (Standalone)

Income Statement

Y/E Mar (Rs mn) FY19 FY20 FY21E FY22E FY23E

Revenue 1,90,700 2,00,096 1,67,393 2,33,604 2,71,603

Expenditure 1,70,678 1,75,919 1,46,335 2,03,852 2,36,772

EBITDA 20,022 24,177 21,059 29,752 34,831

Depreciation 1,389 3,097 2,806 3,250 3,732

EBIT 18,633 21,080 18,252 26,502 31,099

Other Income 1,785 1,464 1,464 1,757 2,108

Interest expenses 445 1,495 1,447 1,496 1,649

PBT 19,974 21,050 18,270 26,763 31,559

Tax 5,530 5,873 4,604 6,744 7,953

Extraordinary Items (700) 0 0 0 0

Minority Int./Income from Assoc. 0 0 0 0 0

Reported Net Income 13,744 15,176 13,666 20,018 23,606

Adjusted PAT 15,292 15,176 13,666 20,018 23,606

Balance Sheet


Equity share capital 888 888 888 888 888

Reserves & surplus 60,929 70,868 80,094 94,786 1,12,177

Net worth 61,817 71,756 80,982 95,674 1,13,065

Minority Interest 0 0 0 0 0

Loan Funds 0 6,262 0 0 0

Net deferred tax liability (848) (1,721) (1,721) (1,721) (1,721)

Total Liabilities 60,970 76,297 79,261 93,953 1,11,344

Net block 10,699 20,657 20,911 22,844 24,639

Investment 8,759 9,831 9,831 9,831 9,831

Current Assets 94,142 1,02,400 1,02,522 1,30,661 1,56,768

Cash & bank balance 10,010 5,962 17,905 17,591 25,876

Other Current Assets 309 340 374 411 453

Current liabilities & Provision 52,881 57,092 54,502 69,883 80,394

Net current assets 41,261 45,308 48,019 60,778 76,374

Misc. exp 0 0 0 0 0

Total Assets 60,970 76,297 79,261 93,953 1,11,344

Cash Flow


PBT (Ex-Other income) (NI+Dep) 18,189 19,586 16,805 25,006 29,450

Other Non-Cash items 0 0 0 0 0

Chg in working cap (3,854) (8,969) 9,233 (13,073) (7,312)

Operating Cashflow 10,171 9,335 25,687 9,935 19,566

Capital expenditure (2,189) (13,304) (3,060) (5,182) (5,526)

Free Cash Flow 7,982 (3,970) 22,627 4,753 14,039

Investments (1,422) (1,072) 0 0 0

Other Investing Cash Flow 0 0 0 0 0

Investing Cashflow (1,825) (12,912) (1,596) (3,425) (3,418)

Equity Capital Raised 0 0 0 0 0

Loans Taken / (Repaid) 0 6,262 (6,262) 0 0

Dividend paid (incl tax) (4,014) (5,238) (4,439) (5,327) (6,215)

Other Financing Cash Flow 0 0 0 0 0

Financing Cashflow (4,458) (471) (12,148) (6,823) (7,863)

Net chg in cash 3,887 (4,048) 11,943 (314) 8,284

Opening cash position 6,123 10,010 5,962 17,905 17,591

Closing cash position 10,010 5,962 17,905 17,591 25,876





June 9, 2020 | 8

Key Ratios

Profitability (%) FY19 FY20 FY21E FY22E FY23E

EBITDA Margin 10.5 12.1 12.6 12.7 12.8

EBIT Margin 9.8 10.5 10.9 11.3 11.5

Effective Tax Rate 27.7 27.9 25.2 25.2 25.2

Net Margin 7.6 7.6 8.2 8.6 8.7

ROCE 36.3 34.4 26.4 32.6 32.4

ROE 26.9 22.7 17.9 22.7 22.6

RoIC 46.9 41.4 32.9 45.3 44.1

Per Share Data (Rs) FY19 FY20 FY21E FY22E FY23E

EPS 17.2 17.1 15.4 22.5 26.6

CEPS 18.8 20.6 18.6 26.2 30.8

BVPS 69.6 80.8 91.2 107.8 127.4

DPS 3.7 5.0 5.0 6.0 7.0

Valuations (x) FY19 FY20 FY21E FY22E FY23E

PER 57.9 58.3 64.8 44.2 37.5

P/CEPS 46.3 42.3 46.9 33.2 28.3

P/BV 14.3 12.3 10.9 9.3 7.8

EV / Sales 4.6 4.4 5.2 3.7 3.2

EV / EBITDA 43.7 36.3 41.2 29.1 24.7

Dividend Yield (%) 0.4 0.5 0.5 0.6 0.7

Gearing Ratio (x) FY19 FY20 FY21E FY22E FY23E

Net Debt/ Equity (0.2) (0.1) (0.2) (0.2) (0.2)

Net Debt/EBIDTA (0.5) (0.3) (0.9) (0.6) (0.8)

Working Cap Cycle (days) 59.8 71.8 65.7 67.5 67.9

Growth (%) FY19 FY20 FY21E FY22E FY23E

Revenue 22.1 4.9 (16.3) 39.6 16.3

EBITDA 15.5 20.8 (12.9) 41.3 17.1

EBIT 14.8 13.1 (13.4) 45.2 17.3

PAT 18.2 10.4 (10.0) 46.5 17.9

Quarterly (Rs mn) Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20

Revenue 46,721 49,397 44,350 62,062 44,288

EBITDA 4,556 5,653 5,132 7,356 6,037

EBITDA Margin (%) 9.8 11.4 11.6 11.9 13.6

PAT 2,946 3,707 3,202 4,699 3,568

EPS (Rs) 3.3 4.2 3.6 5.3 4.0


Shareholding Pattern (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20

Promoters 52.9 52.9 52.9 52.9 52.9

FIIs 19.2 19.6 18.8 18.3 17.7

DIIs 7.2 6.7 8.7 9.1 10.9

Public and Others 20.6 20.8 19.7 19.7 18.5

Source: Capitaline




June 9, 2020 | 9

RECOMMENDATION HISTORY TABLE

Date Closing

Price TP

Period (months)

Rating Analyst

14-Apr-20 967 1,100 12m Buy Ashit Desai

08-Apr-20 913 1,100 12m Buy Ashit Desai

05-Feb-20 1,280 1,240 12m Hold Ashit Desai

25-Dec-19 1,204 1,230 12m Hold Ashit Desai

06-Nov-19 1,156 1,230 12m Hold Ashit Desai

20-Sep-19 1,264 1,385 12m Buy Ashit Desai

06-Aug-19 1,047 1,150 12m Buy Ashit Desai

08-May-19 1,089 1,200 12m Buy Ashit Desai

09-Apr-19 1,099 1,080 12m Buy Ashit Desai

02-Feb-19 992 1,080 12m Accumulate Ashit Desai

09-Nov-18 848 1,000 12m Accumulate Ashit Desai

11-May-18 956 990 12m Hold Amit Purohit

01-Feb-18 831 760 12m Hold Amit Purohit

03-Nov-17 660 800 12m Buy Amit Purohit

03-Aug-17 558 608 12m Accumulate Amit Purohit

02-Aug-17 553 488 12m Hold Amit Purohit


RECOMMENDATION HISTORY CHART

Source: Bloomberg, Company, Emkay Research

480

664

848

1032

1216

1400

11

-Ju

n-1

7

08

-De

c-1

7

06

-Ju

n-1

8

03

-Dec-1

8

01

-Ju

n-1

9

28

-Nov-1

9

26

-Ma

y-2

0

BUY Hold Sell Accumulate

Reduce Price Target Price




June 9, 2020| 10

Emkay Alpha Portfolio – Consumer Goods & Retail

EAP sector portfolio

Company Name BSE200 Weight

EAP Weight

OW/UW (%)

OW/UW (bps)

EAP Weight (Normalised)

Consumer Goods & Retail 13.59 13.59 0% 0 100.00

Asian Paints 1.35 0.60 -56% -76 4.39

Berger Paints 0.22 0.00 -100% -22 0.00

Britannia Industries 0.74 1.28 72% 54 9.39

Colgate-Palmolive 0.33 0.51 53% 18 3.74

Dabur India 0.47 0.40 -15% -7 2.97

Emami 0.08 0.00 -100% -8 0.00

Godrej Consumer Products 0.46 0.00 -100% -46 0.00

Hindustan Unilever 3.46 2.92 -16% -54 21.49

ITC 3.10 3.50 13% 40 25.74

Marico 0.31 0.28 -12% -4 2.03

Nestle India 1.10 0.84 -24% -27 6.15

Pidilite Industries 0.42 0.00 -100% -42 0.00

Radico Khaitan 0.00 0.29 NA 29 2.13

United Breweries 0.13 0.69 439% 56 5.10

United Spirits 0.00 0.42 NA 42 3.07

Varun Beverages 0.10 0.34 244% 24 2.50

ABFRL 0.08 0.27 236% 19 2.01

Jubilant FoodWorks 0.23 0.27 16% 4 1.99

Page Industries 0.21 0.00 -100% -21 0.00

Shoppers Stop 0.00 0.00 NA 0 0.00

Titan Company 0.78 1.00 27% 21 7.32

Cash 0.00 0.00 NA 0 0.00

Source: Emkay Research

* Not under coverage: Equal Weight

High Conviction/Strong Over Weight High Conviction/Strong Under Weight

Sector portfolio NAV

Base Latest

1-Apr-19 5-Sep-19 9-Dec-19 9-Mar-20 8-May-20 8-Jun-20

EAP - Consumer Goods & Retail 100.0 98.5 105.9 102.5 92.1 102.5

BSE200 Neutral Weighted Portfolio (ETF) 100.0 94.1 100.3 96.1 87.7 96.5

*Performance measurement base date 1st April 2019


NAV chart


Please see our model portfolio (Emkay Alpha Portfolio): SMID

Please see our model portfolio (Emkay Alpha Portfolio): Nifty

“Emkay Alpha Portfolio – SMID and Nifty are a supporting document to the Emkay Alpha

Portfolios Report and is updated on regular intervals”

75

83

91

99

107

115

Apr-19 May-19 Jul-19 Sep-19 Nov-19 Dec-19 Feb-20 Apr-20 Jun-20

NAV

EAP - Consumer Goods & Retail BSE200 Neutral Weighted Portfolio (ETF)

Analyst: Ashit Desai

Contact Details

[email protected]

+91 22 6612 1340

Sector

Consumer Goods & Retail

Analyst bio

Ashit Desai holds a PGDM and FRM (US

GARP) with 12 years of research

experience on the sell side. His team

currently covers 24 stocks in the Indian

Consumer and Retail space.


https://web3.emkayglobal.com/ResearchAccess/Upload/SMID_Jun20.pdf

https://web3.emkayglobal.com/ResearchAccess/Upload/Nifty_Jun20.pdf

mailto:[email protected]



June 9, 2020| 11

Emkay Rating Distribution

Ratings Expected Return within the next 12-18 months.

BUY Over 15%

HOLD Between -5% to 15%

SELL Below -5%

Completed Date: 10 Jun 2020 02:20:19 (SGT) Dissemination Date: 10 Jun 2020 02:21:19 (SGT)

Sources for all charts and tables are Emkay Research unless otherwise specified.

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June 9, 2020| 12

ANALYST CERTIFICATION BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL) The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible of the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer, director or employee of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant). The research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. EGFSL has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the EGFSL and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of EGFSL compensation to any specific investment banking function of the EGFSL. 1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interest that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at the arm’s length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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June 9, 2020| 13

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