Aniket Kangane BSE: 500114 | NSE: TITAN

FINANCIAL
MODELING
REPORT
(A Comprehensive DCF and Comparable Comps Valuation)
 TABLE OF
CONTENTS
01 One Page Profile

02 Historical Statement

03 Common Size Statement

04 Ratio Analysis

05 Forecasting

06 Beta Drifting

07 WACC Calculation

08 DCf Valuation

09 Comparable Comps Valuation

10 Altman’s Z Score

11 Value At Risk & Simulation

Titan Company Limited - One Page Profile
Titan Company Limited, founded in 1984, is a leading manufacturer of watches, jewelry, and eyewear in India,
with a strong presence in 32 countries. Renowned for its innovation and customer-centric approach, Titan
holds a significant share in the domestic market. Through strategic collaborations, including a joint venture
with the Tata Group, Titan continues to expand its global footprint, solidifying its position as a key player in
the lifestyle products industry.

INR (Crores)
Key Financial Metrics Mar-20 Mar-21 Mar-22 Mar-23 Share Price - 5Y
Total Sales 21,052 21,644 28,799 40,575 4500
Sales Growth (y-o-y) 6.44% 2.81% 33.06% 40.89% 4000
3500
Gross Profit 4,426 3,983 5,574 8,280
3000
GP Margins (%) 21.02% 18.40% 19.35% 20.41%
2500
EBITDA Margin (%) 11.70% 7.97% 11.61% 12.03% 2000
EBIT Margin (%) 10.02% 6.13% 10.00% 10.90% 1500
Net Profit Margins(%) 6.37% 3.67% 7.02% 7.31% 1000
Earnings Per Share (In Rs.) 15.09 8.94 22.76 33.43 500
EPS Growth (y-o-y) 10.73% -40.75% 154.53% 46.86% 0
2020 2021 2022 2023

Key Financial Ratios Mar-20 Mar-21 Mar-22 Mar-23 Volume - 5Y

Price to Earnings 55.23x 142.16x 103.62x 68.70x 20
EV/EBITDA 34.95x 83.13x 69.04x 47.38x 15
EV/Sales 4.09x 6.63x 8.02x 5.70x
10
Price to Book value 12.43x 18.45x 24.20x 18.84x
5
Return on Equity (%) 20.09% 10.59% 21.72% 25.04%
Return on Capital Employed (%) 20.67% 10.28% 17.76% 20.93% 0
2020 2021 2022 2023
(In Crores)
Top 10 Shareholders Shares Holding (%) Market value Shareholding Pattern
TIDCO 24.75 27.88 80,324
Tata Sons Private Limited 18.51 20.84 60,065 Public &
17.82%
Government
Rekha Jhunjhunwala 3.76 4.23 12,197
Tata Investment Corporation Ltd 1.79 2.01 5,802 DII 10.29%
Life Insurance Corporation Of India 1.58 1.78 5,119
Tata Chemicals Limited 1.38 1.56 4,488
FII 19.01%
Sbi Nifty 50 Etf 1.34 1.51 4,363
Rekha Jhunjhunwala 0.99 1.12 3,214
Promoters 52.90%
Government Of Singapore 0.94 1.05 3,037
Ewart Investments Limited 0.50 0.56 1,611
0.00% 20.00% 40.00% 60.00%

Managerial Remuneration Designation % Change X of Median Salary Capital Structure

Mr. C K Venkataraman MD 9.8 156.87 Share Price 3245.7
Mr. Ashok Sonthalia CFO - - Number Of Shares O/s 88.78
Mr. Dinesh Shetty Co. Secretary 8 - Market Capitalization 288153.2
Mr. Bhaskar Bhat Director 75.57 11.42 Less: Cash 1343
Mr. Ashwani Puri Director 51.29 16.31 Add: Debt 9367
Mr. B Santhanam Director - 15.58 Add: Minority Interest 53
Mr. Pradyumna Vyas Director 12.09 Enterprise Value 296230.2

Future Vision
• To strengthen their domestic presence, Titan is embarking on a significant retail expansion, aiming to open 140-150 new stores
across their popular jewelry brands like Tanishq, Mia, and CaratLane.
• Looking beyond India, Titan is setting its sights on international growth, with a focus on capturing a larger market share in North
America and the Middle East, particularly the lucrative GCC market.
• Titan is strategically focusing on the luxury jewelry segment to meet rising consumer demand. This includes potential new
product lines, intensified brand-building, and possible strategic acquisitions.
• Titan aims to hire over 3,000 specialists in design, luxury, and data analytics over the next five years, emphasizing its
commitment to innovation and future growth.
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

HISTORICAL FINANCIAL STATEMENT

Income Statement
Years Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Sales ₹ 11,913.4 ₹ 11,275.9 ₹ 13,260.8 ₹ 16,119.8 ₹ 19,778.5 ₹ 21,052.0 ₹ 21,644.0 ₹ 28,799.0 ₹ 40,575.0
Sales Growth - -5.35% 17.60% 21.56% 22.70% 6.44% 2.81% 33.06% 40.89%

COGS ₹ 9,615.3 ₹ 9,183.3 ₹ 10,606.0 ₹ 12,762.6 ₹ 15,660.5 ₹ 16,626.0 ₹ 17,661.0 ₹ 23,225.0 ₹ 32,295.0
COGS % Sales 80.71% 81.44% 79.98% 79.17% 79.18% 78.98% 81.60% 80.65% 79.59%

Gross Profit ₹ 2,298.1 ₹ 2,092.6 ₹ 2,654.8 ₹ 3,357.1 ₹ 4,118.0 ₹ 4,426.0 ₹ 3,983.0 ₹ 5,574.0 ₹ 8,280.0
Gross Profit % Sales 19.29% 18.56% 20.02% 20.83% 20.82% 21.02% 18.40% 19.35% 20.41%

Selling & General Expenses 1,145.5 1,153.2 1,490.9 1,712.9 2,124.3 1,963.0 2,258.0 2,230.0 3,398.0
S&G Exp % Sales 9.62% 10.23% 11.24% 10.63% 10.74% 9.32% 10.43% 7.74% 8.37%

EBITDA ₹ 1,152.6 ₹ 939.3 ₹ 1,163.9 ₹ 1,644.2 ₹ 1,993.8 ₹ 2,463.0 ₹ 1,725.0 ₹ 3,344.0 ₹ 4,882.0
EBITDA Margins 9.67% 8.33% 8.78% 10.20% 10.08% 11.70% 7.97% 11.61% 12.03%

Interest ₹ 80.7 42.4 37.7 52.9 52.5 ₹ 166.0 ₹ 203.0 ₹ 218.0 ₹ 300.0
Interest % Sales 0.68% 0.38% 0.28% 0.33% 0.27% 0.79% 0.94% 0.76% 0.74%

Depreciation ₹ 89.6 ₹ 98.2 ₹ 110.5 ₹ 131.4 ₹ 162.8 ₹ 348.0 ₹ 375.0 ₹ 399.0 ₹ 441.0
Depreciation % Sales 0.75% 0.87% 0.83% 0.82% 0.82% 1.65% 1.73% 1.39% 1.09%

EBT ₹ 982.3 ₹ 798.8 ₹ 1,015.6 ₹ 1,459.9 ₹ 1,778.4 ₹ 1,949.0 ₹ 1,147.0 ₹ 2,727.0 ₹ 4,141.0
EBT % Sales 8.25% 7.08% 7.66% 9.06% 8.99% 9.26% 5.30% 9.47% 10.21%

Tax ₹ 232.6 ₹ 191.6 ₹ 276.0 ₹ 427.9 ₹ 568.2 ₹ 609.0 ₹ 353.0 ₹ 706.0 ₹ 1,173.0
Effective Tax Rate 23.68% 23.99% 27.17% 29.31% 31.95% 31.25% 30.78% 25.89% 28.33%

Net Profit ₹ 749.7 ₹ 607.2 ₹ 739.7 ₹ 1,032.0 ₹ 1,210.2 ₹ 1,340.0 ₹ 794.0 ₹ 2,021.0 ₹ 2,968.0
Net Profit Margins 6.29% 5.38% 5.58% 6.40% 6.12% 6.37% 3.67% 7.02% 7.31%

No. Of Equity Shares ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 88.8

Earnings Per Share ₹ 8.4 ₹ 6.8 ₹ 8.3 ₹ 11.6 ₹ 13.6 ₹ 15.1 ₹ 8.9 ₹ 22.8 ₹ 33.4
EPS Growth % -19.01% 21.82% 39.52% 17.27% 10.73% -40.75% 154.53% 46.86%

Dividend Per Share ₹ 2.3 ₹ 2.2 ₹ 2.6 ₹ 3.7 ₹ 5.0 ₹ 4.0 ₹ 4.0 ₹ 7.5 ₹ 10.0
Dividend Payout Ratio 27.24% 32.17% 31.21% 32.26% 36.68% 26.57% 44.84% 33.03% 29.99%

Retained Earning 72.76% 67.83% 68.79% 67.74% 63.32% 73.43% 55.16% 66.97% 70.01%

Balance Sheet
Years Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Equity Share ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 88.8 ₹ 89.0 ₹ 89.0 ₹ 89.0 ₹ 89.0
Reserves ₹ 2,995.1 ₹ 3,417.5 ₹ 4,143.6 ₹ 5,001.1 ₹ 5,981.4 ₹ 6,580.0 ₹ 7,408.0 ₹ 9,214.0 ₹ 11,762.0
Borrowings ₹ 99.8 ₹ 113.1 ₹ 1,882.4 ₹ 1,691.0 ₹ 2,393.0 ₹ 3,562.0 ₹ 5,638.0 ₹ 7,275.0 ₹ 9,367.0
Other Liabilities ₹ 2,684.3 ₹ 2,722.6 ₹ 2,292.8 ₹ 2,740.2 ₹ 3,246.7 ₹ 3,313.0 ₹ 3,309.0 ₹ 4,610.0 ₹ 5,802.0
Total Liabilities ₹ 5,868.0 ₹ 6,341.9 ₹ 8,407.6 ₹ 9,521.0 ₹ 11,709.8 ₹ 13,544.0 ₹ 16,444.0 ₹ 21,188.0 ₹ 27,020.0

Fixed Asset Net Block ₹ 699.1 ₹ 770.5 ₹ 1,188.7 ₹ 1,473.8 ₹ 1,566.6 ₹ 2,633.0 ₹ 2,523.0 ₹ 2,544.0 ₹ 2,998.0
Capital Work in Progress ₹ 55.2 ₹ 106.7 ₹ 152.1 ₹ 43.4 ₹ 31.8 ₹ 18.0 ₹ 32.0 ₹ 85.0 ₹ 144.0
Investments ₹ 3.1 ₹ 30.4 ₹ 430.7 ₹ 36.0 ₹ 108.4 ₹ 158.0 ₹ 2,824.0 ₹ 294.0 ₹ 2,515.0
Other Assets ₹ 657.7 ₹ 678.3 ₹ 723.8 ₹ 1,129.4 ₹ 1,477.3 ₹ 1,939.0 ₹ 1,731.0 ₹ 2,518.0 ₹ 2,762.0
Total Non Current ₹ 1,415.1 ₹ 1,585.9 ₹ 2,495.3 ₹ 2,682.6 ₹ 3,184.1 ₹ 4,748.0 ₹ 7,110.0 ₹ 5,441.0 ₹ 8,419.0

Inventory 4049.3 4447.15 4925.74 5924.84 7038.82 8103 8408 13609 16584
Receivables ₹ 189.7 ₹ 192.5 ₹ 207.6 ₹ 295.7 ₹ 420.5 ₹ 312.0 ₹ 366.0 ₹ 565.0 ₹ 674.0
Cash & Bank ₹ 213.8 ₹ 116.4 ₹ 778.9 ₹ 617.9 ₹ 1,066.5 ₹ 381.0 ₹ 560.0 ₹ 1,573.0 ₹ 1,343.0
Total Current Asset ₹ 4,452.8 ₹ 4,756.0 ₹ 5,912.3 ₹ 6,838.4 ₹ 8,525.8 ₹ 8,796.0 ₹ 9,334.0 ₹ 15,747.0 ₹ 18,601.0

Total Assets ₹ 5,868.0 ₹ 6,341.9 ₹ 8,407.6 ₹ 9,521.0 ₹ 11,709.8 ₹ 13,544.0 ₹ 16,444.0 ₹ 21,188.0 ₹ 27,020.0

Check TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

Cash Flow Statement

Years Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Profit from operations ₹ 1,163.0 ₹ 942.0 ₹ 1,073.0 ₹ 1,642.0 ₹ 2,183.0 ₹ 2,481.0 ₹ 1,789.0 ₹ 3,298.0 ₹ 4,937.0
Receivables (₹ 39.0) - (₹ 12.0) (₹ 90.0) (₹ 139.0) ₹ 109.0 (₹ 59.0) (₹ 207.0) (₹ 112.0)
Inventory (₹ 180.0) (₹ 398.0) (₹ 448.0) (₹ 996.0) (₹ 1,120.0) (₹ 1,057.0) (₹ 316.0) (₹ 5,199.0) (₹ 2,977.0)
Payables ₹ 1,079.0 (₹ 245.0) ₹ 238.0 ₹ 95.0 ₹ 32.0 (₹ 310.0) ₹ 195.0 ₹ 504.0 (₹ 89.0)
Loans Advances (₹ 71.0) (₹ 66.0) - ₹ 3.0 (₹ 24.0) (₹ 20.0) (₹ 8.0) (₹ 3.0) (₹ 18.0)
Operating borrowings - - ₹ 763.0 (₹ 270.0) ₹ 741.0 (₹ 768.0) ₹ 2,625.0 ₹ 1,188.0 (₹ 99.0)
Other WC items (₹ 1,204.0) ₹ 545.0 ₹ 375.0 ₹ 22.0 ₹ 206.0 (₹ 226.0) ₹ 184.0 ₹ 497.0 ₹ 882.0
Working capital changes (₹ 415.0) (₹ 163.0) ₹ 916.0 (₹ 1,237.0) (₹ 304.0) (₹ 2,272.0) ₹ 2,621.0 (₹ 3,220.0) (₹ 2,413.0)
Direct taxes (₹ 245.0) (₹ 202.0) (₹ 277.0) (₹ 456.0) (₹ 636.0) (₹ 557.0) (₹ 271.0) (₹ 802.0) (₹ 1,154.0)
Cash from Operating Activity ₹ 503.0 ₹ 576.0 ₹ 1,712.0 (₹ 50.0) ₹ 1,243.0 (₹ 348.0) ₹ 4,139.0 (₹ 724.0) ₹ 1,370.0
Fixed assets purchased (₹ 209.0) (₹ 254.0) (₹ 256.0) (₹ 305.0) (₹ 265.0) (₹ 355.0) (₹ 146.0) (₹ 224.0) (₹ 432.0)
Fixed assets sold ₹ 2.0 ₹ 2.0 ₹ 5.0 ₹ 6.0 ₹ 1.0 ₹ 10.0 ₹ 7.0 ₹ 8.0 ₹ 12.0
Investments purchased (₹ 135.0) (₹ 1,078.0) (₹ 325.0) - (₹ 36.0) (₹ 13.0) (₹ 2,656.0) (₹ 253.0) (₹ 2,104.0)
Investments sold ₹ 135.0 ₹ 1,083.0 - ₹ 412.0 ₹ 18.0 - ₹ 43.0 ₹ 2,870.0 -
Interest received ₹ 77.0 ₹ 58.0 ₹ 41.0 ₹ 64.0 ₹ 85.0 ₹ 73.0 ₹ 49.0 ₹ 56.0 ₹ 143.0
Invest in subsidiaries - - - - - (₹ 39.0) - - -
Investment in group cos - (₹ 18.0) - - - - - - -
Acquisition of companies - - (₹ 385.0) - - - - - -
Inter corporate deposits (₹ 48.0) ₹ 38.0 ₹ 5.0 (₹ 35.0) (₹ 115.0) ₹ 200.0 (₹ 50.0) (₹ 344.0) ₹ 294.0
Other investing items ₹ 60.0 ₹ 10.0 (₹ 38.0) (₹ 43.0) (₹ 485.0) ₹ 359.0 (₹ 46.0) (₹ 948.0) ₹ 273.0
Cash from Investing Activity - ₹ 999.0 (₹ 885.0) (₹ 14,664.0) ₹ 4,533.0 (₹ 632.0) (₹ 331.0) (₹ 7,373.0) (₹ 6,485.0) (₹ 1,071.0)
Proceeds from borrowings - - - - - ₹ 693.0 - ₹ 349.0 ₹ 1,684.0
Repayment of borrowings - - - - (₹ 39.0) - (₹ 562.0) (₹ 7.0) (₹ 7.0)
Interest paid fin (₹ 81.0) (₹ 42.0) (₹ 38.0) (₹ 54.0) (₹ 53.0) (₹ 399.0) (₹ 317.0) (₹ 218.0) (₹ 300.0)
Dividends paid (₹ 185.0) (₹ 394.0) (₹ 4.0) (₹ 277.0) (₹ 397.0) (₹ 536.0) (₹ 355.0) (₹ 355.0) (₹ 666.0)
Financial liabilities - - - - - - - (₹ 172.0) (₹ 254.0)
Other financing items (₹ 739.0) (₹ 68.0) (₹ 124.0) ₹ 79.0 - - - - -
Cash from Financing Activity - (₹ 4,935.0) (₹ 6,813.0) (₹ 6,939.0) (₹ 20,505.0) (₹ 14,512.0) (₹ 17,591.0) (₹ 9,786.0) (₹ 24,642.0) (₹ 26,695.0)

Net Cash Flow ₹ 4,417.0 ₹ 2,330.0 (₹ 10,072.0) (₹ 2,754.0) (₹ 303.0) (₹ 919.0) ₹ 6,065.0 (₹ 7,242.0) (₹ 5,299.0)
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

COMMON SIZE STATEMENT

Income Statement
Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Raw Material Cost 75.17% 74.25% 74.06% 78.57% 76.70% 76.16% 75.27% 91.79% 80.32%
Change in Inventory 1.72% 1.70% 2.37% 6.07% 3.93% 4.17% -0.56% 16.65% 5.51%
Power and Fuel 0.34% 0.37% 0.33% 0.28% 0.25% 0.25% 0.17% 0.16% 0.15%
Other Mfr. Exp 1.57% 2.32% 1.21% 0.77% 0.98% 1.02% 0.65% 0.64% 0.55%
Employee Cost 5.34% 6.21% 6.74% 5.62% 5.18% 5.72% 4.94% 4.71% 4.08%
Selling and admin 7.00% 7.51% 9.13% 7.93% 7.35% 6.98% 4.75% 5.89% 6.69%
Other Expenses 2.62% 2.72% 2.11% 2.70% 3.39% 2.34% 5.68% 1.85% 1.68%
Other Income 0.56% 0.61% -0.32% 0.43% 0.90% 0.73% 0.83% 0.61% 0.75%
Depreciation 0.75% 0.87% 0.83% 0.82% 0.82% 1.65% 1.73% 1.39% 1.09%
Interest 0.68% 0.38% 0.28% 0.33% 0.27% 0.79% 0.94% 0.76% 0.74%
Profit before tax 8.80% 7.70% 7.34% 9.49% 9.89% 9.98% 6.13% 10.08% 10.96%
Tax 1.95% 1.70% 2.08% 2.65% 2.87% 2.89% 1.63% 2.45% 2.89%
Net profit 6.85% 5.98% 5.37% 7.01% 7.10% 7.13% 4.50% 7.55% 8.01%
Dividend Amount 1.71% 1.73% 1.74% 2.07% 2.24% 1.69% 1.64% 2.32% 2.19%
EBITDA 10.23% 8.93% 8.56% 10.81% 11.06% 12.46% 8.80% 12.14% 12.73%
-
Balance Sheet
Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Total Liabilities 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Equity Share Capital 1.51% 1.40% 1.06% 0.93% 0.76% 0.66% 0.54% 0.42% 0.33%
Reserves 51.04% 53.89% 49.28% 52.53% 51.08% 48.58% 45.05% 43.49% 43.53%
Borrowings 1.70% 1.78% 22.39% 17.76% 20.44% 26.30% 34.29% 34.34% 34.67%
Other Liabilities 45.75% 42.93% 27.27% 28.78% 27.73% 24.46% 20.12% 21.76% 21.47%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Net Block 11.91% 12.15% 14.14% 15.48% 13.38% 19.44% 15.34% 12.01% 11.10%
Capital Work in Progress 0.94% 1.68% 1.81% 0.46% 0.27% 0.13% 0.19% 0.40% 0.53%
Investments 0.05% 0.48% 5.12% 0.38% 0.93% 1.17% 17.17% 1.39% 9.31%
Other Assets 11.21% 10.69% 8.61% 11.86% 12.62% 14.32% 10.53% 11.88% 10.22%
Receivables 3.23% 3.04% 2.47% 3.11% 3.59% 2.30% 2.23% 2.67% 2.49%
Inventory 69.01% 70.12% 58.59% 62.23% 60.11% 59.83% 51.13% 64.23% 61.38%
Cash & Bank 3.64% 1.83% 9.26% 6.49% 9.11% 2.81% 3.41% 7.42% 4.97%
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

RATIO ANALYSIS
Years Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Trend Mean Median
Sales Growth - -5.35% 17.60% 21.56% 22.70% 6.44% 2.81% 33.06% 40.89% 17.46% 19.58%
EBITDA Growth - -18.50% 23.91% 41.27% 21.26% 23.53% -29.96% 93.86% 45.99% 25.17% 23.72%
EBT Growth - -18.68% 27.15% 43.74% 21.82% 9.59% -41.15% 137.75% 51.85% 29.01% 24.48%
Net Profit Growth - -19.01% 21.82% 39.52% 17.27% 10.73% -40.75% 154.53% 46.86% 28.87% 19.54%
Dividend Growth - 95.66% 118.18% 144.23% 133.34% 80.20% 100.00% 187.50% 133.33% 124.05% 125.76%
Gross Margin 19.29% 18.56% 20.02% 20.83% 20.82% 21.02% 18.40% 19.35% 20.41% 19.86% 20.02%
EBITDA Margin 9.67% 8.33% 8.78% 10.20% 10.08% 11.70% 7.97% 11.61% 12.03% 10.04% 10.08%
EBIT Margin 8.92% 7.46% 7.94% 9.38% 9.26% 10.05% 6.24% 10.23% 10.95% 8.94% 9.26%
EBT Margin 8.25% 7.08% 7.66% 9.06% 8.99% 9.26% 5.30% 9.47% 10.21% 8.36% 8.99%
Net Profit Margin 6.29% 5.38% 5.58% 6.40% 6.12% 6.37% 3.67% 7.02% 7.31% 6.02% 6.29%
S&G Exp % Sales 9.62% 10.23% 11.24% 10.63% 10.74% 9.32% 10.43% 7.74% 8.37% 9.81% 10.23%
Depreciation & Sales 0.75% 0.87% 0.83% 0.82% 0.82% 1.65% 1.73% 1.39% 1.09% 1.11% 0.87%
Operating Income % Sales 8.92% 7.46% 7.94% 9.38% 9.26% 10.05% 6.24% 10.23% 10.95% 8.94% 9.26%
Return on Capital Employed 33.39% 23.24% 17.23% 22.31% 21.63% 20.67% 10.28% 17.76% 20.93% 20.83% 20.93%
Retained Earning 72.76% 67.83% 68.79% 67.74% 63.32% 73.43% 55.16% 66.97% 70.01% 67.34% 67.83%
Return on Equity % 24.31% 17.32% 17.48% 20.28% 19.94% 20.09% 10.59% 21.72% 25.04% 19.64% 20.09%
Self Sustained Growth Rate 17.69% 11.75% 12.02% 13.73% 12.62% 14.75% 5.84% 14.55% 17.53% 13.39% 13.73%
Interest Coverage Ratio 13.17x 19.86x 27.91x 28.59x 34.85x 12.74x 6.65x 13.51x 14.80x 19.12x 14.80x
Debtor Turnover Ratio 62.79x 58.58x 63.88x 54.52x 47.04x 67.47x 59.14x 50.97x 60.20x 58.29x 59.14x
Creditor Turnover Ratio 4.44x 4.14x 5.78x 5.88x 6.09x 6.35x 6.54x 6.25x 6.99x 5.83x 6.09x
Inventory Turnover Ratio 2.94x 2.54x 2.69x 2.72x 2.81x 2.60x 2.57x 2.12x 2.45x 2.60x 2.60x
Fixed Asset Turnover Ratio 17.04x 14.63x 11.16x 10.94x 12.62x 8.00x 8.58x 11.32x 13.53x 11.98x 11.32x
Capital Turnover Ratio 3.86x 3.22x 3.13x 3.17x 3.26x 3.16x 2.89x 3.10x 3.42x 3.24x 3.17x
(In days)
Debtor Days 6 6 6 7 8 5 6 7 6 6 6
Creditor Days 82 88 63 62 60 57 56 58 52 64 60
Cash Conversion Cycle -76 -82 -57 -55 -52 -52 -50 -51 -46 -58 -52
CFO/Sales 4.22% 5.11% 12.91% -0.31% 6.28% -1.65% 19.12% -2.51% 3.38% 5.17% 4.22%
CFO/Total Assets 8.57% 9.08% 20.36% -0.53% 10.62% -2.57% 25.17% -3.42% 5.07% 8.04% 8.57%
CFO/Total Debt 504.06% 509.51% 90.95% -2.96% 51.94% -9.77% 73.41% -9.95% 14.63% 135.76% 51.94%
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

FORCASTING
Year Weight Year Sales Sales Growth Year Weight Year EBITDA EBITDA Growth
1 2015A 11,913.4 1 2015A 1,152.6
2 2016A 11,275.9 -5.35% 2 2016A 939.3 -18.50%
3 2017A 13,260.8 17.60% 3 2017A 1,163.9 23.91%
4 2018A 16,119.8 21.56% 4 2018A 1,644.2 41.27%
5 2019A 19,778.5 22.70% 5 2019A 1,993.8 21.26%
6 2020A 21,052.0 6.44% 6 2020A 2,463.0 23.53%
7 2021A 21,644.0 2.81% 7 2021A 1,725.0 -29.96%
8 2022A 28,799.0 33.06% 8 2022A 3,344.0 93.86%
9 2023A 40,575.0 40.89% 9 2023A 4,882.0 45.99%
10 2024F 36,233.8 -10.70% 10 2024F 4,151.4 -14.97%
11 2025F 39,382.4 8.69% 11 2025F 4,552.6 9.66%
12 2026F 42,530.9 7.99% 12 2026F 4,953.8 8.81%
13 2027F 45,679.5 7.40% 13 2027F 5,355.0 8.10%
14 2028F 48,828.1 6.89% 14 2028F 5,756.2 7.49%
15 2029F 51,976.6 6.45% 15 2029F 6,157.4 6.97%

Sales Growth EBITDA Growth

60,000 7,000
50,000 6,000
40,000 5,000
30,000 4,000
3,000
20,000
2,000
10,000 1,000
0 0
2024F
2025F
2026F
2027F
2028F
2029F
2015A
2016A
2017A
2018A
2019A
2020A
2021A
2022A
2023A

2015A
2016A
2017A
2018A
2019A
2020A
2021A
2022A
2023A
2024F
2025F
2026F
2027F
2028F
2029F
Year Weight Year EBT EBT Growth Year Weight Year EPS EPS Growth
1 2015A 982.3 1 2015A 8.4
2 2016A 798.8 -18.68% 2 2016A 6.8 -19.01%
3 2017A 1,015.6 27.15% 3 2017A 8.3 21.82%
4 2018A 1,459.9 43.74% 4 2018A 11.6 39.52%
5 2019A 1,778.4 21.82% 5 2019A 13.6 17.27%
6 2020A 1,949.0 9.59% 6 2020A 15.1 10.73%
7 2021A 1,147.0 -41.15% 7 2021A 8.9 -40.75%
8 2022A 2,727.0 137.75% 8 2022A 22.8 154.53%
9 2023A 4,141.0 51.85% 9 2023A 33.4 46.86%
10 2024F 3,375.3 -18.49% 10 2024F 27.0 -19.10%
11 2025F 3,694.8 9.47% 11 2025F 29.6 9.39%
12 2026F 4,014.3 8.65% 12 2026F 32.1 8.59%
13 2027F 4,333.8 7.96% 13 2027F 34.7 7.91%
14 2028F 4,653.4 7.37% 14 2028F 37.2 7.33%
15 2029F 4,972.9 6.87% 15 2029F 39.7 6.83%

EBT Growth EPS Growth

6,000 50
5,000 40
4,000
30
3,000
2,000 20
1,000 10
0 0
2024F
2025F
2026F
2027F
2028F
2029F
2015A
2016A
2017A
2018A
2019A
2020A
2021A
2022A
2023A
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

BETA REGRESSION
Regression Beta - 2 Years Weekly

Titan Co. Weekly Returns Nifty Returns Beta Drifiting

Date Closing Price Returns Closing Price Returns Levered Raw Beta 1.06
09-05-2022 2077.6 15782.2 Raw Beta Weight 75.00%
16-05-2022 2122.6 2.17% 16266.2 3.07% Market Beta 1
23-05-2022 2134.7 0.57% 16352.5 0.53% Market Beta Weight 25.00%
30-05-2022 2189.5 2.57% 16584.3 1.42%
06-06-2022 2127.8 -2.82% 16201.8 -2.31% Adjusted Beta 1.05
13-06-2022 1923.4 -9.61% 15293.5 -5.61%
20-06-2022 2031.8 5.64% 15699.3 2.65%
27-06-2022 1933.1 -4.86% 15752.0 0.34%
04-07-2022 2129.9 10.18% 16220.6 2.97%
11-07-2022 2182.6 2.48% 16049.2 -1.06%
18-07-2022 2317.5 6.18% 16719.4 4.18%
25-07-2022 2344.5 1.16% 17158.3 2.62%
01-08-2022 2424.9 3.43% 17397.5 1.39%
08-08-2022 2464.0 1.61% 17698.2 1.73%
15-08-2022 2432.7 -1.27% 17758.4 0.34%
22-08-2022 2524.7 3.78% 17558.9 -1.12%
29-08-2022 2604.2 3.15% 17539.4 -0.11%
05-09-2022 2595.0 -0.35% 17833.3 1.68%
12-09-2022 2603.4 0.32% 17530.8 -1.70%
19-09-2022 2663.8 2.32% 17327.3 -1.16%
26-09-2022 2598.5 -2.45% 17094.3 -1.34%
03-10-2022 2721.7 4.74% 17314.7 1.29%
10-10-2022 2609.3 -4.13% 17185.7 -0.74%
17-10-2022 2657.0 1.83% 17576.3 2.27%
24-10-2022 2727.6 2.65% 17786.8 1.20%
31-10-2022 2760.8 1.22% 18117.2 1.86%
07-11-2022 2643.2 -4.26% 18349.7 1.28%
14-11-2022 2557.5 -3.24% 18307.7 -0.23%
21-11-2022 2587.0 1.15% 18512.8 1.12%
28-11-2022 2609.4 0.87% 18696.1 0.99%
05-12-2022 2607.0 -0.09% 18496.6 -1.07%
12-12-2022 2474.8 -5.07% 18269.0 -1.23%
19-12-2022 2475.0 0.01% 17806.8 -2.53%
26-12-2022 2589.1 4.61% 18105.3 1.68%
02-01-2023 2529.9 -2.29% 17859.4 -1.36%
09-01-2023 2409.4 -4.76% 17956.6 0.54%
16-01-2023 2363.6 -1.90% 18027.7 0.40%
23-01-2023 2323.7 -1.69% 17604.3 -2.35%
30-01-2023 2455.1 5.66% 17854.1 1.42%
06-02-2023 2460.5 0.22% 17856.5 0.01%
13-02-2023 2492.2 1.29% 17944.2 0.49%
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

WACC
All figures are in INR unless stated otherwise.
Peer Comps
Debt/ Debt/ Levered Unlevered
Name Country Total Debt Total Equity Tax Rate 1 Equity Capital 2 3
Beta Beta

Titan Company India 15,528.0 2,92,108.3 30.00% 5.32% 5.05% 1.05 1.01
Kalyan Jewellers India 2,521.5 40,615.0 30.00% 6.21% 5.85% 0.41 0.39
Rajesh Exports India 626.8 8,735.3 30.00% 7.18% 6.69% 0.50 0.48
Vaibhav Global India 185.3 6,124.9 30.00% 3.03% 2.94% 0.65 0.64
Thangamayil Jewellery Ltd
India 526.6 3,327.4 30.00% 15.83% 13.66% 0.18 0.16
Average 30.00% 7.51% 6.84% 0.56 0.54
Median 30.00% 6.21% 5.85% 0.50 0.48

Cost of Debt Cost of Equity

Pre-tax Cost of Debt 7.50% Risk Free Rate 7.16%

Tax Rate 30.00% Equity Risk Premium 9.65%
4
After Tax Cost of Debt 5.25% Levered Beta 0.50
Cost of Equity 11.99%

Capital Structure Levered Beta

Current Target Comps Median Unlevered Beta 0.48
Total Debt 15,528.0 5.05% 6.84% Target Debt/ Equity 7.34%
Market Capitalization 2,92,108.3 94.95% 93.16% Tax Rate 30.00%
Total Capitalization 3,07,636.3 100.00% 100.00% Levered Beta 0.50

Debt / Equity 5.32% 7.34% Weighted Average Cost of Capital

1. Tax Rate considered as Marginal Tax Rate for the country Cost of Equity 11.99%
2. Levered Beta is based on 2 year weekly data Equity Weight 93.16%
3. Unlevered Beta = Levered Beta/(1+(1-Tax Rate) x Debt/Equity)
3. Levered Beta = Unlevered Beta/(1+(1-Tax Rate) x Debt/Equity) Cost of Debt 5.25%
Debt Weight 6.84%

WACC 11.53%
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

DCF VALUATION
Calculation of PV of FCFF Mar-23A Mar-24F Apr-25F Apr-26F Apr-27F Apr-28F
EBIT 4,423.0 5,359.8 6,494.9 7,870.5 9,537.4 11,557.3
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
NOPAT 3,096.1 3,751.8 4,546.4 5,509.3 6,676.2 8,090.1
Add: D&A 441.0 534.4 647.6 784.7 950.9 1,152.3
Change in WC 1,046.0 1,267.5 1,536.0 1,861.3 2,255.5 2,733.2
Less: Net Capex (420.0) (509.0) (616.7) (747.4) (905.7) (1,097.5)
Free Cash Flow to Firm 4,163.1 5,044.8 6,113.3 7,408.0 8,977.0 10,878.2
Mid Year Convention 0.5 1.5 2.5 3.5 4.5
Discounting Factor 0.947 0.849 0.761 0.683 0.612
PV of FCFF 4777.0 5190.3 5639.4 6127.3 6657.5

1
Expected Growth 21.18%
2
Terminal Growth 6.80%
WACC 11.53% Sensitivity Analysis - Enterprise Value
WACC
Calculation of Terminal Value 1,98,987.28 10.00% 11.53% 12.00% 13.00%
5.00% 189741.8 151955.4 143641.7 129235.4
FCFF (N+1) 13182.1 6.80% 280501.4 198987.3 183536.0 158512.7
WACC 11.53% 7.00% 297308.7 206520.7 189741.8 162850.1
Terminal Growth 6.80% 8.00% 431767.4 256996.2 230079.4 189741.8
Terminal Value 2,78,749.4 GROWTH

Calculation of Equity Value

PV of FCC 28391.5 Sensitivity Analysis - Equity Value Per Share

PV of Terminal Value 170595.8 WACC
Enterprise Value 198987.3 2,150.97 10.00% 11.53% 12.00% 13.00%
Add: Cash 1343.0 5.00% 2046.8 1621.2 1527.6 1365.3
Less: Debt 9367.0 6.80% 3069.1 2151.0 1976.9 1695.1
Equity Value 190963.3 7.00% 3258.4 2235.8 2046.8 1743.9
No of Shares 88.8 8.00% 4773.0 2804.4 2501.2 2046.8
Equity Value per Share 2151.0 GROWTH
Share Price 3245.7
Premium/Discount 1.51x

Assumptions
1. The growth rate is based on Titan's historical growth trends (past 5 years average)
2. The terminal growth rate is based on India's long term GDP growth rate.
Titan Company Ltd.
BSE: 500114 | NSE: TITAN
Amount in Crores

COMPARABLE COMPANY VALUATION

Market Data Financials Valuation

Share Share Enterprise

Company Ticker Price Outstanding Equity Value Net Debt Value Revenue EBITDA Net Income EV/Sales EV/EBITDA P/E
Titan Company TITAN 3,290.3 88.8 2,92,112.8 (942.0) 2,91,170.8 51,084.0 20,770.0 3,496.0 5.70x 14.02x 83.56x
Kalyan Jewellers KALYANKJIL 394.3 103.0 40,616.8 (717.9) 39,898.9 17,395.2 3,580.3 528.6 2.29x 11.14x 76.84x
Rajesh Exports RAJESHEXPO 295.9 29.5 8,736.5 (2,016.9) 6,719.5 3,04,679.4 1,384.5 733.1 0.02x 4.85x 11.92x
Thangamayil Jewellery Ltd VAIBHAVGBL 1,212.7 02.7 3,322.7 (59.2) 3,263.4 3,621.0 736.0 126.0 0.90x 4.43x 26.36x
Vaibhav Global THANGAMAYL 369.8 16.6 6,123.1 (148.7) 5,974.4 2,944.3 381.6 129.0 2.03x 15.66x 47.45x
High 5.70x 15.66x 83.56x
75th Percentile 2.29x 14.02x 76.84x
Average 2.19x 10.02x 49.23x
Median 2.03x 11.14x 47.45x
25th Percentile 0.90x 4.85x 26.36x
Low 0.02x 4.43x 11.92x

Titan Company Comparable Valuation EV/Sales EV/EBITDA P/E

Implied Enterprise Value 1,03,656.1 2,31,463.7 1,64,959.1
Net Debt (942.0) (942.0) (942.0)
Implied Equity Value 1,04,598.1 2,32,405.7 1,65,901.1
Share Outstanding 88.8 88.8 88.8
Implied Value Per Share 1178.2 2617.8 1868.7
TITAN COMPANY LIMITED
(TITAN | BSE Code: 500114)

INR 3245.7
52 Week (High - INR 3886 & Low - INR 2269)

About the Company

Titan Company Limited, founded in 1984, is a leading manufacturer of watches, jewelry, and eyewear in India, with a strong presence in 32 countries.
Renowned for its innovation and customer-centric approach, Titan holds a significant share in the domestic market. Through strategic collaborations,
including a joint venture with the Tata Group, Titan continues to expand its global footprint, solidifying its position as a key player in the lifestyle
products industry.

Financial Summary

Working Capital/Total Retained Earnings / Total Assets EBIT / Total Assets

Assets
537% 519% 69.31% 148%
126%
431% 53% 113%
47% 49% 106%
355% 37% 80%
282% 307%
53%
17%

Mar-18 Mar-19 Mar-18 Mar-19 Mar-20

Mar-18 Mar-19 Mar-20 Mar-20 Mar-21

Market Cap / Long Term Sales / Total Assets Altman's Z Score

Liabilities 1353%
1262% 49.0
1132% 48.1
1094%
4947% 40.8 39.9
4236% 800% 858%
28.5 29.0
3095%
2327% 2453% 2384%

Mar-18 Mar-19 Mar-20 Mar-18 Mar-19 Mar-20 Mar-18 Mar-19 Mar-20

Altmam's Z Score Summary

• Titan's consistently high percentage (averaging around 400-500%) indicates efficient asset management and ample liquidity,
ensuring smooth operations and meeting short-term obligations effectively.
• Titan's rising proportion of retained earnings to total assets (increasing from 37.37% to 69.31%) reflects its confidence in
reinvesting profits for sustainable growth, bolstering its financial stability and long-term prospects.
• Titan's strong EBIT to total assets ratio (ranging from 52.56% to 147.53%) underscores its ability to generate significant earnings
from its asset base, indicating operational efficiency and profitability.
• Titan's fluctuating ratio (ranging from 2327.17% to 4947.19%) suggests varying investor perceptions and market conditions,
impacting its ability to repay long-term debts with market capitalization.
• Titan's consistently high sales-to-assets ratio (averaging around 800-1350%) reflects efficient asset utilization, translating into
robust sales performance and revenue generation.
• Titan's generally moderate Altman Z Score (ranging from 28.5 to 49.0) implies a consistently strong financial position, well above
the threshold of 3, signifying a low risk of bankruptcy and indicating stability in its financial operations.
 Altman's Z Score Analysis Calculation
Working Capital / Total Assets
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Working Capital 5227.7 6756.3 7422.0 7756.0 13655.0 15561.0
Total Assets 1473.8 1566.6 2633.0 2523.0 2544.0 2998.0
Working Capital/Total Assets (A) 354.71% 431.26% 281.88% 307.41% 536.75% 519.05%

Retained Earnings / Total Assets

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Retained Earnings 699.1 766.3 984.0 438.0 1353.5 2078.0
Total Assets 1473.8 1566.6 2633.0 2523.0 2544.0 2998.0
Retained Earnings / Total Assets (B) 47.43% 48.91% 37.37% 17.36% 53.20% 69.31%

EBIT / Total Assets

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
EBIT 1558.0 1972.4 2110.0 1326.0 2879.0 4423.0
Total Assets 1473.8 1566.6 2633.0 2523.0 2544.0 2998.0
EBIT / Total Assets (C) 105.71% 125.90% 80.14% 52.56% 113.17% 147.53%

Market Cap / Long Term Liabilities

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Market Capitalization 83657.4 101373.4 82893.9 138323.7 225159.4 223272.8
Long Term liabilities 1691.0 2393.0 3562.0 5638.0 7275.0 9367.0
Market Cap / Long Term Liabilities (D) 4947.19% 4236.28% 2327.17% 2453.42% 3094.97% 2383.61%

Sales / Total Assets

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Sales 16119.8 19778.5 21052.0 21644.0 28799.0 40575.0
Total Assets 1473.8 1566.6 2633.0 2523.0 2544.0 2998.0
Sales / Total Assets (E) 1093.75% 1262.49% 799.54% 857.87% 1132.04% 1353.40%

Altman's Z Score
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Final Score 49.0 48.1 28.5 29.0 40.8 39.9

Financial Health Strong Strong Strong Strong Strong Strong

Disclaimer: This report is made as a part of educational assignment and is meant for educational purpose only. The author of this report is not liable
for any losses due to action taken basis this report. It is advisable to consult SEBI registered research analyst before making any investments
Titan Company Ltd.
BSE: 500114 | NSE: TITAN

Value at Risk (VAR) & Monte Carlo Simulation

Date Adj Close Return Sorted Return Replication Simulated Returns Calucation of Value at Risk (VAR)
14-10-2008 43.17 -164.92% 15.50% 1 -3.74%
11-06-2013 224.59 152.55% 14.81% 2 -0.07% Historical Approach
14-03-2008 48.85 274.89% 13.78% 3 1.35% Mean -0.09%
01-03-2001 3.13 0.78% 13.58% 4 -1.92% Std Deviation 2.83%
24-01-2003 3.10 -598.33% 13.31% 5 -0.96% Min -25.61%
08-07-2019 1230.68 155.08% 13.07% 6 0.12% Max 15.50%
14-08-2013 260.99 218.66% 12.91% 7 -0.64% Stock Price Currnet 3245.7
19-05-2006 29.31 -66.47% 12.84% 8 -1.89%
21-01-2008 56.97 13.80% 12.30% 9 -3.59% Percentile Confidence Var % Stock Price Var(INR)
03-10-2008 49.63 -289.03% 12.23% 10 -0.55% 5% 95.00% -4.74% 3399.6 -153.9
20-03-2020 893.21 345.49% 12.20% 11 -1.70% 1% 99.00% -8.10% 3508.6 -262.9
06-06-2006 28.22 210.06% 11.95% 12 -5.40% 0.50% 99.50% -9.74% 3561.9 -316.2
22-02-2001 3.45 -231.74% 11.92% 13 1.10% 10% 90.00% -3.09% 3346.1 -100.4
17-05-2006 35.05 -59.76% 11.66% 14 2.73%
18-01-2008 63.71 268.25% 11.19% 15 3.17% Calucation of Monte Carlo Simulation
14-05-2004 4.36 -405.21% 11.13% 16 2.79%
10-06-2013 250.63 350.94% 10.97% 17 -0.41% Monte Carlo Simulation Approach
23-07-1996 7.50 43.35% 10.92% 18 -0.38% Mean -0.09%
13-05-2004 4.86 79.71% 10.92% 19 2.61% Std Deviation 2.81%
23-02-1998 2.19 10.52% 10.52% 20 -1.59% Min -11.24%
24-02-1998 1.97 -646.58% 10.49% 21 3.64% Max 9.79%
05-11-2019 1267.21 543.56% 10.48% 22 -0.62% Stock Price Currnet 3245.7
20-01-2004 5.52 82.04% 10.20% 23 -3.06%
04-06-1998 2.43 10.87% 10.04% 24 -1.90% Percentile Confidence Var % Stock Price Var(INR)
12-03-2001 2.18 -628.68% 9.88% 25 -2.37% 5% 95.00% -4.73% 3399.1 -153.4
11-03-2020 1172.31 318.59% 9.80% 26 -1.03% 1% 99.00% -6.66% 3461.9 -216.2
25-05-2009 48.47 197.55% 9.70% 27 -3.53% 0.50% 99.50% -7.27% 3481.6 -235.9
24-07-1996 6.72 74.27% 9.20% 28 2.29% 10% 90.00% -3.71% 3366.2 -120.5
25-07-2002 3.20 16.03% 9.20% 29 -2.22%
23-05-2001 2.72 62.44% 9.09% 30 -0.23%
13-09-2001 1.46 -44.14% 9.05% 31 0.30%
25-11-1998 2.27 -322.30% 8.83% 32 0.25%