Titan Industries - Regulatory concerns seems over, Maintain BUY - Emkay

Reco: BUY
CMP: Rs 237
Target Price: Rs 280

- RBI notification on gold import, i) increase cash margin to 100% for gold imports and abolishing credit for gold import including gold on lease – changes Titan's financial model

- Impact the following – i. some risk on gold exposure, ii. Reduction in payable days as gold-on-lease ceases and iii. Lower other income & debt addition on books

- Earnings impact of -9% each for FY14E/FY15E. Impact of cash flow to be transitional, expect FCF to be positive in FY15E. Return ratios to drop by 4-5% in FY14/15E

- Regulatory concerns seem over. Maintain revenue growth and BUY rating with PT of Rs 280/share. Expansion plan review & RBI targeting savings scheme – the only caveats.

Source : Equity Bulls

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