Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Equity Capital Markets

Kalyan Jewellers / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/kalyan-jewellers" target="_blank" data-smartkarma-citation="entities:29714:1" rel="noopener">Kalyan Jewellers (KALYAN IN)</a> is a pan-India jeweler with 107 showrooms located across 21 states in India. It also has a sizeable presence in Middle East with 30 showrooms across UAE, Oman, Qatar, Kuwait and Bahrain. Our research on the jewelry industry in India suggests that except for Tanishq [owned by <a href="https://www.smartkarma.com/entities/titan-co-ltd" target="_blank" data-smartkarma-citation="entities:12630:1" rel="noopener">Titan Co Ltd (TTAN IN)</a>] which has carved out itself as a standout premium brand, most other pan-India and organized players have limited differentiation relative to competition. Kalyan is no exception. Its operational metrics suggest that it lags the market leader, Tanishq, by a wide margin despite being one of the largest organized players in the sector in terms of revenue and market share.

Kalyan Jewellers (KALYAN IN) is a pan-India jeweler with 107 showrooms located across 21 states in India. It also has a sizeable presence in Middle East with 30 showrooms across UAE, Oman, Qatar, Kuwait and Bahrain. Our research on the jewelry industry in India suggests that except for Tanishq [owned by Titan Co Ltd (TTAN IN)] which has carved out itself as a standout premium brand, most other pan-India and organized players have limited differentiation relative to competition. Kalyan is no exception. Its operational metrics suggest that it lags the market leader, Tanishq, by a wide margin despite being one of the largest organized players in the sector in terms of revenue and market share. 

Pre-IPO | Kalyan Jewelers: Nothing Differentiated and Nowhere Near to Market Leader Tanishq

Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Bottom-Up

Tata Consumer Products / Equity Bottom-Up

In this insight, we discuss  <a href="https://www.smartkarma.com/entities/tata-consumer-products" target="_blank" data-smartkarma-citation="entities:258:1" rel="noopener">Tata Consumer Products (TATACONS IN)</a> 's potential to outperform peers in the India consumer sector in terms of revenue and profit growth over the next few years. Its inclusion in India's Nifty index from March 31st would attract more investor attention and investment to the stock. The predominantly beverages (branded tea, coffee) company that competes with global multinationals is now expanding its foods business to address the highly unorganised but growing domestic packaged kitchen staples and snacks/breakfast segment. From Tata salt to Tata Starbucks, this consumer goods company already have a wide array of brands under its portfolio. Leveraging on the goodwill enjoyed by the Tata brand in India and by expanding its reach and distribution wider, Tata Consumer is fast-tracking growth in the foods segment. The potential is immense, competition (national level) is scant and the young company (in its new avatar, name and structure) can make it big if it successfully adapts few pages from the playbook of <a href="https://www.smartkarma.com/entities/titan-co-ltd" target="_blank" data-smartkarma-citation="entities:12630:1" rel="noopener">Titan Co Ltd (TTAN IN)</a>- another Tata enterprise that leveraged quality and brand to take on large unorganised consumer sectors.

In this insight, we discuss  Tata Consumer Products (TATACONS IN) 's potential to outperform peers in the India consumer sector in terms of revenue and profit growth over the next few years. Its inclusion in India's Nifty index from March 31st would attract more investor attention and investment to the stock. The predominantly beverages (branded tea, coffee) company that competes with global multinationals is now expanding its foods business to address the highly unorganised but growing domestic packaged kitchen staples and snacks/breakfast segment. From Tata salt to Tata Starbucks, this consumer goods company already have a wide array of brands under its portfolio. Leveraging on the goodwill enjoyed by the Tata brand in India and by expanding its reach and distribution wider, Tata Consumer is fast-tracking growth in the foods segment. The potential is immense, competition (national level) is scant and the young company (in its new avatar, name and structure) can make it big if it successfully adapts few pages from the playbook of Titan Co Ltd (TTAN IN)- another Tata enterprise that leveraged quality and brand to take on large unorganised consumer sectors. 

Tata Consumer (TATACONS IN): Index Inclusion Adds Further Flavour. Tasty Mix.

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

We have had a bullish stance for <a href="https://www.smartkarma.com/entities/titan-co-ltd" target="_blank" data-smartkarma-citation="entities:12630:1" rel="noopener">Titan Co Ltd (TTAN IN)</a> for over two years now, where channel interactions led us to believe that growth may beat consensus highlighted in our insights <a href="https://www.smartkarma.com/insights/titan-co-ltd-ttan-in-channel-checks-suggest-revenue-growth-might-beat-consensus" target="_blank" data-smartkarma-citation="insights:26200" rel="noopener">Titan Co Ltd (TTAN IN) | Channel Checks Suggest Revenue Growth Might Beat Consensus</a> , <a href="https://www.smartkarma.com/insights/titan-ttan-in-jewellery-margins-surprise" target="_blank" data-smartkarma-citation="insights:36351" rel="noopener">Titan (TTAN IN) | Jewellery Margins Surprise</a> and <a href="https://www.smartkarma.com/insights/asian-jewellery-retailers-titan-vs-chow-tai-fook" target="_blank" data-smartkarma-citation="insights:40289" rel="noopener">Asian Jewellery Retailers | Titan Vs Chow Tai Fook</a> which was done during the pandemic.
Till now,  we expected TTAN to emerge stronger - with a higher market share as the most trusted and the safest player in the market. 
However, Q3 performance indicates that the "Strong might not be getting Stronger", with the COVID tailwinds of trust and safety fading and consensus still upgrading revenues, we believe that a potential disappointment lies ahead.

We have had a bullish stance for Titan Co Ltd (TTAN IN) for over two years now, where channel interactions led us to believe that growth may beat consensus highlighted in our insights Titan Co Ltd (TTAN IN) | Channel Checks Suggest Revenue Growth Might Beat Consensus , Titan (TTAN IN) | Jewellery Margins Surprise and Asian Jewellery Retailers | Titan Vs Chow Tai Fook which was done during the pandemic.
Till now,  we expected TTAN to emerge stronger - with a higher market share as the most trusted and the safest player in the market. 
However, Q3 performance indicates that the "Strong might not be getting Stronger", with the COVID tailwinds of trust and safety fading and consensus still upgrading revenues, we believe that a potential disappointment lies ahead. 

Titan Co Ltd (TTAN IN) | Fading Tailwinds, Potential Disappointment Lies Ahead

<a href="https://www.smartkarma.com/entities/titan-co-ltd" target="_blank" data-smartkarma-citation="entities:12630:1" rel="noopener">Titan Co Ltd (TTAN IN)</a> reported its Q3FY21 earnings. It reported strong growth in Jewelry sales for the quarter. January (Jan) sales growth is even higher, suggesting strong recovery momentum in place. Titan has been also making transformational changes in the Eyewear business to turn it around. This seems to be working with losses reducing over the past few quarters.

Titan Co Ltd (TTAN IN) reported its Q3FY21 earnings. It reported strong growth in Jewelry sales for the quarter. January (Jan) sales growth is even higher, suggesting strong recovery momentum in place. Titan has been also making transformational changes in the Eyewear business to turn it around. This seems to be working with losses reducing over the past few quarters.

Earnings Update | Titan: All that Glitters Is Gold

Thematic (Sector/Industry)

The objective of this insight is to reflect back on our work published on SmartKarma - to highlight what has worked for us and more importantly what has not worked and our plans to improve the same. 
2020 is indeed special and we are unlikely to see something similar in our professional life once again. Therefore, we have made an attempt to capture our key learnings, which will also enable us to reflect back on the same at frequent intervals in time. 
We also highlight our key themes for 2021 along with sectorial preferences where we might deploy our resources.

The objective of this insight is to reflect back on our work published on SmartKarma - to highlight what has worked for us and more importantly what has not worked and our plans to improve the same. 
2020 is indeed special and we are unlikely to see something similar in our professional life once again. Therefore, we have made an attempt to capture our key learnings, which will also enable us to reflect back on the same at frequent intervals in time. 
We also highlight our key themes for 2021 along with sectorial preferences where we might deploy our resources. 

2020 Review & 2021 Key Themes | What Worked and What Has Not

India

Titan Co. Ltd. manufactures and retails jewelry and watches. The Company also produces perfume for men and women.

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Titan Co Ltd (TTAN IN)

Pre-IPO | Kalyan Jewelers: Nothing Differentiated and Nowhere Near to Market Leader Tanishq

The jewelry industry in India is highly fragmented. Kalyan has limited differentiation relative to its competitors. It also lags behind...

Ankit Agrawal, CFA

Tata Consumer (TATACONS IN): Index Inclusion Adds Further Flavour. Tasty Mix.

Tata consumer is fast-tracking growth in the foods business by expanding into the unorganised India kitchen staples segment and expanding its...

Devi Subhakesan