Titan Share Glimmers in Green on Upbeat Q4 Updates, Gold Rush

Shares of Titan Company skyrocketed as much as 7% on Tuesday as investors cheered for the company's upbeat Q4 business update. To top it up, the upswing in gold prices have also shaped up strong growth expectations for the jewellery maker, further bolstering investor sentiment.

The Tata group company clocked in a 25% on year spike in revenue across all its verticals.

Titan's flagship jewellery business delivered a 25% on year growth in revenue, driven by a spike in gold prices. International brokerage Macquarie stated that the jewellery revenue growth recorded by the company in the March quarter turned out to be better-than-expected.

However, the uptick in gold rates played both boon and bane for Titan. While it boosted growth for high value jewellery, it also had a dampening effect on demand coming in from lower price brackets. To that effect, the company reported just single-digit growth in the number of buyers in the March quarter.

As for the company's digital-first jewellery brand Caratlane, revenue growth came at 22% from the year ago period, boosted by a decent performance in its studded collection. However, Macquarie noted that despite the double-digit growth in the segment, this up and coming vertical underperformed on expectations in Q4.

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The number of buyers in the category grew in mid-single digits during the March quarter, while like-to-like growth stood at 11%. During the quarter gone by, Caratlane added 17 new domestic stores on a net basis.

Moving on, the company's eyecare vertical saw a 19% rise in revenue, which was fuelled by a growth in volumes as well as customer base. The growth for the watches and wearables vertical also stuck around 22% on year. Other verticals that include fragrances and fashion accessories recorded the strongest growth in revenue, up 26% year-on-year. The growth banked on the 12% spike in revenue from fashion accessories.

However, Titan's ethnic wear brand Taneira emerged as a drag in Q4 as it saw a 4% fall in its revenue.

Factoring these numbers, Macquarie has pegged its standalone Q4 EBITDA growth expectations for Titan at 20%. The brokerage also rolled out an 'outperform' call on Titan, anticipating an over 32% upside potential in the coming months. The strong upside potential in the stock that Macquarie forecasts comes after a 10% correction that rocked the scrip in the last six months.

Looking ahead, prospects for Titan remain upbeat, especially with the upcoming festive period of Akshaya Tritiya and the marriage season lined up in the ongoing quarter. Sales of gold jewellery usually witness an uptick during these festive and marriage seasons, boding well with Titan's growth trajectory.