Titan Co.’s third-quarter earnings have led analysts to retain their bullish ratings on the stock.
Macquarie has maintained its ‘Outperform’ call, setting a target price of Rs 4,150, a potential upside of 15.35% over the pervious close.
Noting that jewellery segment’s margins are in line with expectations, the firm highlighted that margins for watches are lagging. Investors are awaiting more clarity on next year’s jewellery margins, particularly concerning whether persistent gold inflation might lead to flat year-on-year margins, it said.
Meanwhile, Morgan Stanley also kept its ‘Overweight’ rating on Titan, with a target price of Rs 3,876, a likely gain of 7.7% over Tuesday’s close. Their report indicates a slight underperformance in jewellery margins, contrasted by a sharp increase in margins at Caratlane.
The firm said the bull case reflects Titan’s medium-term growth outlook, although weaker near-term demand and gold price volatility remain risks.
Titan’s December quarter has been a mixed bag.
Consolidated jewellery margins recovered to 11%, back within the company’s guided range after dipping to 10.5% in the first half of FY25. A significant positive was the 21% growth in studded jewellery sales, which has eased concerns about the impact of lab-grown diamonds on overall margins.
In terms of financial performance, Titan reported a revenue increase of 25.24%, reaching Rs 17,740 crore from Rs 14,164 crore year-over-year, slightly surpassing analyst expectations of Rs 17,476 crore.
Net profit saw a marginal decline of 0.56%, coming in at Rs 1,047 crore compared to Rs 1,053 crore in the previous year, and Bloomberg estimate of Rs 1,097 crore.
On the operating side, Ebitda growth was more modest at 6.96%, amounting to Rs 1,674 crore against the estimated Rs 1,704 crore. This resulted in a margin of 9.43%, a decline from the previous year’s 11.04%, and below the forecasted 9.8%, indicating a contraction by 161 basis points.
Segment-wise, Titan experienced robust growth across most of its divisions. The jewellery segment grew by 26%, reflecting strong consumer demand. Watches & Wearables and EyeCare segments also showed healthy growth at 15% and 16%, respectively. The emerging business saw a more modest growth of 5%. Notably, the international jewellery business expanded significantly, up by 64%, while Caratlane, a key subsidiary, grew by 27%, showcasing the strength and diversification of Titan’s portfolio.
Titan share price ended 0.22% lower at Rs 3,597.7 apiece on Tuesday, ahead of results, compared to 1.62% rise in the benchmark NSE Nifty 50.
The average of 12-month analyst price target of Rs 3,686 implies a potential upside of 2.5%.
. Read more on Markets by NDTV Profit.Morgan Stanley and Macquarie have maintained their bullish rating on Titan share price after the December quarter results. Read MoreMarkets, Business
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