TIMEX WATCHES[CMP Rs.27.5]
We initiate coverage on the stock with a 'Buy' rating for long term and a price objective of Rs 36 for 12 months. But we suggest stock to be held by investors for long term, without looking at medium term price objective.
The new facility at Baddi, Himachal Pradesh with 2 mn units per annum will help the company to lower costs and make up for the demand which will be created by increasing the outlets and distribution channels as well as the growing sales volumes. The company's renewed focus on the mid and high end segment of watches will help it to increase the average realization to increase the sales and expand the margins. The technological supiriority of Timex US, in terms of incorporating advanced features in watches viz. - Global Positioning technology, Indiglow technology, with heart rate monitor, or speed/data links with PCs etc will give marketing edge to company.
TWL has repositioned its TIMEX brand as a fashion accessory and more aspirational for the consumers that combines best of performance and fashion. The company has rolled out its retail strategy for opening of over 100 "The Time Factory" stores by 2008 on franchisee basis. We believe that TWL is rightly poised for higher growth in its top line.
The company is on take off stage and with low cost manufacturing facilities, parent's Technological support, expanding retail network and growing demand for high-end watches; it Is set to grow at scorching pace and earn decent profits in coming years.
BUY for long term.
Source: Anand Rathi Securities Ltd.,
Disc: don't hold
We initiate coverage on the stock with a 'Buy' rating for long term and a price objective of Rs 36 for 12 months. But we suggest stock to be held by investors for long term, without looking at medium term price objective.
The new facility at Baddi, Himachal Pradesh with 2 mn units per annum will help the company to lower costs and make up for the demand which will be created by increasing the outlets and distribution channels as well as the growing sales volumes. The company's renewed focus on the mid and high end segment of watches will help it to increase the average realization to increase the sales and expand the margins. The technological supiriority of Timex US, in terms of incorporating advanced features in watches viz. - Global Positioning technology, Indiglow technology, with heart rate monitor, or speed/data links with PCs etc will give marketing edge to company.
TWL has repositioned its TIMEX brand as a fashion accessory and more aspirational for the consumers that combines best of performance and fashion. The company has rolled out its retail strategy for opening of over 100 "The Time Factory" stores by 2008 on franchisee basis. We believe that TWL is rightly poised for higher growth in its top line.
The company is on take off stage and with low cost manufacturing facilities, parent's Technological support, expanding retail network and growing demand for high-end watches; it Is set to grow at scorching pace and earn decent profits in coming years.
BUY for long term.
Source: Anand Rathi Securities Ltd.,
Disc: don't hold
