Funda Analysis

Accumulate ITC for Long Term - Recommendation Date 14th Aug - Target 331

The company reported results post amalgamation with its subsidiary BORL (Bharat Oman Refineries). While not comparable on like-to-like basis, overall numbers were sharply lower than estimates. GRM at US$ 27.5/bbl was broadly in line with estimates. Marketing segment earnings was lower than estimated and was further impacted by marketing inventory loss of | 371 crore. In the current quarter, benchmark Singapore GRMs have dipped QoQ. Stability in GRMs at higher level and passing on higher crude oil costs to retail customers will be the key for better performance.

Buy TITAN for Long Term - Recommendation Date 14th Aug - Target 331

Titan reported a healthy operational performance with strong beat on the margins front. As guided by the management in its prequarterly update, the jewellery division (excluding gold bullion sale in both quarters) reported robust sales growth of 204% YoY to | 7995 crore (impressive three year CAGR: 24%). Share of studded ratio surpassed preCovid levels with contribution increasing 400 bps YoY to 26.0% (Q1FY20: 25%). Watches segment reported 169% YoY growth to | 786 crore (110% of pre-Covid levels), whereas eyewear division reported 173% YoY growth to | 183 crore (123% of pre-Covid levels). Overall consolidated revenues (including gold bullion sale: | 356 crore) grew 172% YoY to | 9443 crore (I-direct estimate: | 9329 crore). Owing to better studded mix and positive operating leverage, EBITDA margins expanded significantly by 870 bps YoY to 12.7% (Q4FY22: 10.2%, I-direct estimate: 11.3%). Absolute EBITDA was at | 1196 crore (higher than our estimate of | 1054 crore) with robust three year CAGR of 28%

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