>TITAN INDUSTRIES

􀂄 Policy actions impacting; though not significantly: Government policy actions (customs duty, PAN card restriction) have started impacting TTAN, though not significantly. However, it is moderating the pace of shift from unorganised to organized segment, of which, Titan has been a key beneficiary so far. According to the management, absence of consumer demand in grammage terms, particularly in the last six months, has been slightly surprising despite the
prevailing weak consumer sentiment.

􀂄 Various plans to induce demand: On its part, in order to induce consumer jewellery demand, TTAN is experimenting with an exchange scheme in some states and intends to roll it out on a bigger scale soon. Currently, exchange forms just 15% of the business and in the new scheme, it will accept even Jewellery from other retailers with some carratage correction. As per management, it will help achieve twin objectives: a) restrict cash outflow for consumer and b) reduce overall Gold imports for the country. It may also contemplate a cut in labour charge to drive jewellery demand.

􀂄 Watches – expanding selectively: TTAN will concentrate its efforts around Fastrack and Helios and will go easy on World of Titan expansion as it already has a geographically strong 350 store presence.

􀂄 Confident of achieving medium‐term target (US$3bn turnover by FY15e): Focus for FY13e has shifted to bottom-line growth by cost containment (wherever possible) and margin enhancement (direct Gold import will save 70bps). We maintain ‘BUY’ with TP of Rs255.

RISH TRADER