Shares of Titan Company slumped 6% on July 8 after the firm’s first-quarter revenue growth fell short of market expectations, particularly in its core jewellery segment.
The company reported a 20% year-on-year revenue growth for the April–June quarter, below the anticipated 22%, dampening investor sentiment.
Titan added 10 new stores during the quarter, taking its total retail footprint to 3,322 outlets, including 3,291 in India and 31 overseas. The domestic business grew 19% on year, led by strong performances in watches (23%) and CaratLane (38%). However, the flagship jewellery segment, which accounts for a bulk of Titan’s revenue grew by only 18%, with brands like Tanishq, Mia, and Zoya contributing a 17% rise.
Despite a solid 49% growth in its international business, the domestic jewellery numbers failed to impress. Titan attributed the slowdown in consumer sentiment to volatile gold prices between May and June, which led buyers to opt for lighter weight and lower-karat jewellery.
While Akshaya Tritiya saw encouraging festive demand, analysts flagged concerns over the lack of momentum in studded jewellery sales, a major high-margin avenue for the company. Typically, studded pieces perform better during periods of rising gold prices, but this time low footfall and cautious spending weighed on demand.
Brokerages were mixed in their reactions. Morgan Stanley retained its ‘overweight’ rating, with a price target of ₹3,876, even as it touted the quarter gone by as a 'big miss' on jewellery growth and buyer additions.
On the other hand, Emkay Global remained cautious, highlighting that Titan's jewellery growth of 17% was well below its recent 25% trend. “Street expectations of high-teen growth for FY26 at stable margins may now be at risk,” the firm noted, retaining a ‘reduce’ rating and trimming its price target to ₹3,350. It also warned of a strong base effect going forward, as the upcoming quarters last year had seen a boost from customs duty cuts.
Looking ahead, JM Financial expects Titan’s standalone revenue to grow ~18% on year, led by a similar growth in the jewellery segment (excluding bullion). The brokerage projects an Ebit margin of 11% for jewellery and overall Ebitda and profit growth of around 20% and 19% year-on-year, respectively.
