Kalyan Jewellers Outperforms Titan In Q3, Likely Beginning Of Trajectory Change: ICICI Securities

ICICI Securities Report

Both Titan Company Ltd. and Kalyan Jewellers India Ltd. reported decent demand prints in Q3 FY23 update. Titan’s jewellery performance of ~11% YoY growth in revenues was similar to Kalyan’s (standalone) revenue growth of ~12% YoY.

However, when we compare three year compound annual growth rate for both of these companies, Titan’s three year CAGR of 21% is superior to Kalyan’s three year CAGR 11%.

Titan's new consumer recruitment and store expansion (up 22 stores in Q3) are key drivers for outperformance. Kalyan’s three year CAGR performance, though lagged that of Titan, needs to be seen in the context of lower store expansion benefit.

We note that the pace of growth for both brands has decelerated as compared to last few quarters and second half of the quarter saw some deceleration due to increase in gold prices and some deceleration in consumer discretionary spends in general.

We believe, jewelry segment can outperform (other consumer discretionary segments) as it is relatively immune (inelastic wedding purchases, gold as an investment asset etc.) to general slowdown in consumer discretionary spends.

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