Titan Reports Disappointing Q1 Results, Stock Price Plunges Over 3%

Titan‘s recent quarterly update revealed a lackluster performance in its jewellery business for the first quarter of FY25, leading to a sharp decline in its stock price. The Tata Group company reported a 9% year-on-year growth in Q1FY25, with domestic jewellery operations experiencing an 8% YoY increase. However, the growth fell short of market expectations, attributed to weakened consumer demand due to higher gold prices and a lower number of wedding days.

The domestic jewellery segment of Titan saw growth primarily driven by higher average selling prices, while customer growth remained in the low single digits. The Watches & Wearables division fared better with a 14% YoY growth in the domestic business, supported by a robust 17% revenue growth in analog watches. Wearables witnessed a slight decline of 6% YoY.

EyeCare’s domestic business posted a 3% YoY growth, with the category benefiting from its expansion into affordable fashion offerings. Titan Company expanded its retail network by adding 61 stores during the quarter, bringing its total presence to 3,096 stores.

Despite the overall growth, Titan’s Q1 performance disappointed Antique Stock Broking, citing weaknesses in the jewellery sector. However, the brokerage firm remains optimistic about Titan’s long-term prospects, emphasizing its market share gains and strong brand presence across geographies.

On the other hand, Kotak Institutional Equities downgraded Titan’s stock to ‘Reduce’ from ‘Add’, lowering the target price as well. The brokerage cited multiple margin headwinds and competitive pressures, including the expected impact of Aditya Birla Group‘s Novel Jewels and LGDs on Tanishq’s growth and profitability.

Titan’s stock price has witnessed a significant decline, falling over 8% in the past month and 16% in the last three months. Year-to-date, the stock is down over 14%. Despite the recent challenges, Antique Stock Broking maintains a ‘Buy’ recommendation on Titan shares, projecting a sales/earnings CAGR of 21%/28% over FY24–27E.