The Tata Group company's lackluster performance in the jewelry division during the first quarter of FY25 disappointed the street, and Titan's share price fell more than 2% in early Monday trade. Titan shares continued to decline for the sixth trading day, plunging as high as 3.46% to ₹3,156.15 each on the BSE.
In Q1FY25, Titan firm had a 9% year-over-year (YoY) increase, the firm reported in its quarterly business update on July 5. Due to a decrease in wedding days and a spike in gold prices, consumer demand was poor, resulting in an 8% YoY growth in its domestic jewelry business.
According to the corporation, buyer growth was in the low single digits while domestic growth was mostly driven by increases in average selling prices. The domestic business in the Watches & Wearables category rose 14% YoY, with a solid 17% YoY rise in analog revenue. YoY, wearables saw a 6% decrease.
The domestic business of EyeCare had a 3% YoY gain, and the division's entry into the inexpensive fashion market is contributing to the category's volume growth. During the June 2024 quarter, Titan Company added 61 outlets (net), bringing the total number of locations in its combined retail network to 3,096.
Titan's Q1FY25 quarter performance fell short of Antique Stock Broking's projections because of the jewelry industry's decline. While emerging companies saw a decrease in sales growth, with Taneira and Fragrances & Fashion Accessories gaining 4% YoY, Caratlane continued to perform effectively, growing 18% YoY.
vintage stock Given Titan Company's ability to grow market share across regions (particularly the South) on the strength of its brand and great execution, broking is still bullish about the company in the long run. Over FY24–27E, a CAGR of 21%–28% is anticipated in Titan's revenue and earnings.
For Titan shares, the brokerage company kept its "Buy" rating with a target price of ₹4,490 per share.
Titan shares saw a roughly 2% decrease in closing price on Friday following Kotak Institutional Equities' downgrade of the stock from "Add" to "Reduce" and reduction of the target price from ₹3,600 to ₹3,075 per share. The downgrade was attributed to many margin headwinds and an unfavorable risk-reward ratio.
With the introduction of Aditya Birla Group's Novel Jewels, Titan's competitive intensity is expected to increase, and the brokerage reduced its estimates for EPS (earnings per share) for FY 2025–2027 by 5–6%. It also took into account the direct and indirect effects of LGDs on Tanishq's robust growth and profitability.
In a letter, Kotak Equities stated, "We applaud Titan's execution, but the risk-reward is unfavorable amid these headwinds and high expectations."
The price of Titan's shares has dropped by more than 8% in a single month and 16% in three. Over 14% of the stock has lost value year to date (YTD). Titan shares were down 3.38% at ₹3,158.70 a share on the BSE at 9:20 a.m.
