Titan share price falls over 3% as Q1 jewellery business growth disappoints

Titan share price declined over 2% in early Monday trade after the Tata Group company reported weak growth in the jewellery business during the first quarter of FY25, disappointing the street. Titan shares plunged as much as 3.46% to ₹3,156.15 apiece on the BSE, extending the fall for the fifth trading session.

Titan Company registered a growth of 9% year-on-year (YoY) in Q1FY25, the company said in its quarterly business update on July 5. Its domestic jewellery operations grew 8% YoY, impacted by weakness in consumer demand on account of a surge in gold prices and lower number of wedding days.

Domestic growth came largely through increase in average selling prices whereas buyer growth was in low single digits, the company said.

In the Watches & Wearables segment, the domestic business grew 14% YoY, with revenue growth in analog at a healthy 17% YoY. Wearables witnessed a decline of 6% YoY.

EyeCare’s domestic business recorded a growth of 3% YoY, while the division’s foray into affordable fashion is aiding volume growth for the category.

Titan Company added a total of 61 stores (net) during the June 2024 quarter expanding combined retail network presence to 3,096 stores.

Titan’s Q1FY25 quarter performance was below Antique Stock Broking’s expectations due to weakness in the jewelry business.

Caratlane continues to perform strongly, growing 18% YoY, while Emerging businesses witnessed moderation with revenue growing 4% with Taneira and Fragrances & Fashion Accessories growing 4% YoY.

Antique Stock Broking remains optimistic about Titan Company over the long term, given its ability to gain market share across geographies (including the South) on the back of strong execution and brand. It expects Titan to deliver sales/ earnings CAGR of 21%/ 28% over FY24–27E.

The brokerage firm maintained its ‘Buy’ recommendation on Titan shares with a target price of ₹4,490 per share.

On Friday, Titan shares ended nearly 2% lower after Kotak Institutional Equities downgraded the stock to ‘Reduce’ from ‘Add’ and cut the target price to ₹3,075 per share from ₹3,600 earlier citing multiple margin headwinds and unfavorable risk-reward.

The brokerage cut Titan’s FY 2025-2027 EPS (earnings per share) estimates by 5-6% factoring in external headwinds such as competitive intensity that is likely to exacerbate with the launch of Aditya Birla Group’s Novel Jewels and direct/indirect impact of LGDs on Tanishq’s studded growth and profitability.

“We admire Titan’s execution, but the risk-reward is unfavorable amid these headwinds and high expectations,” Kotak Equities said in a note.

Titan share price has fallen over 8% in one month and 16% in three months. The stock is down over 14% year-to-date (YTD).

At 9:20 am, Titan shares were trading 3.38% lower at ₹3,158.70 apiece on the BSE.

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