Titan shares fall up to 4% on brokerage downgrades and target price cut post Q1 update

Titan share price NSE, Titan Q1 business update: Titan shares in Monday’s early trade fell over 4 per cent to day’s low price of Rs 3,135.3 after the company released its quarterly business update for Q1FY25 on Friday post market hours. At the jewellery to watches retailer, jewellery business operations logged 8 per cent on-year growth. Domestic growth came largely through increase in average selling prices whereas buyer growth was in low single digits. As of June 2024, the company’s jewellery division outlets totalled to 699.

At the last count, shares of the company traded with a cut of 3.62 per cent at Rs 3,151 per share.

The company’s watches and wearables division logged 14 per cent on-year growth in the domestic market. Customer preferences towards premium products was clearly visible with higher growths seen in Titan, Helios channel and Nebula, Edge and Xylys, noted the company’s filing. 

Meanwhile, the company’s eyecare domestic business logged 3 per cent on-year growth. The company noted that its foray in the affordable fashion is aiding volume growth. 
Furthermore, in the Emerging Businesses, Taneira’s revenue grew 4 per cent year-on-year.

Here’s what global brokerages recommend on Titan post its Q1FY25 business update?

Global brokerage JP Morgan has downgraded the stock to ‘neutral’ rating from the earlier ‘overweight’ call and also slashed the target to Rs 3,450 from Rs 3,850, implying an upside of nearly 6 per cent. The company’s jewellery division revenue growth at 9 per cent in Q1 was below its already lowered expectations. 

The other concerns highlighted by the brokerage included:
a) moderating growth for studded jewellery
b) intensifying promotional activity, which is margin negative

Considering these, JP Morgan reduced the company’s EPS estimate for FY25-27 by 5-6 per cent.

Goldman Sachs also maintained its ‘buy’ on Titan, nonetheless, it has reduced the target to Rs 3,700 from the earlier Rs 3,800, signifying a potential upside of over 13 per cent. The brokerage has slashed the company’s FY25-26 earnings by 3-4 per cent. The brokerage held that competitors did much better in Q1. Further it added that while jewellery margins are likely to be weak; FY25 guidance is still 
achievable, but likely to be at the lower end of the range.