Titan Slumps 4%! Is the Domestic Jewellery Business Losing Its Sheen?
Titan’s stock declined sharply after the Tata Group firm reported sluggish growth in its jewellery business for Q1 FY25, disappointing investors. According to Titan’s July 5 quarterly update, the company saw a year-on-year (YoY) growth of 9%, with domestic jewellery operations growing only 8% YoY.
Titan’s stock saw deep cuts as the Tata Group firm reported sluggish growth in its jewellery business for the first quarter of FY25, much to the disappointment of investors. Shares of Titan fell sharply by 3.46% to Rs 3,156.15 apiece on the BSE, marking the fifth consecutive trading session of losses.
According to Titan’s quarterly business update released on July 5, the company registered a year-on-year (YoY) growth of 9% in Q1FY25. However, its domestic jewellery operations recorded a modest 8% YoY growth, influenced by weakened consumer demand attributed to higher gold prices and fewer wedding days.
Titan highlighted that domestic growth primarily stemmed from an increase in average selling prices, whereas buyer growth remained in the low single digits.
In contrast, the Watches & Wearables segment showed a more robust performance with domestic business expanding by 14% YoY. Analog watches saw a healthy revenue growth of 17% YoY, while Wearables experienced a decline of 6% YoY.
The EyeCare division’s domestic business posted a 3% YoY growth, benefiting from its entry into affordable fashion, which contributed to volume growth in the category.
During the June 2024 quarter, Titan added a net total of 61 stores, expanding its combined retail network presence to 3,096 stores.
Brokerages On Titan Company
Goldman Sachs on Titan
Goldman Sachs has revised Titan’s target price downward from Rs 3800 to Rs 3700, citing maintenance concerns. The report notes that Titan’s Q1 revenue update was disappointing, with a sharper slowdown in jewellery sales than anticipated.
Key competitors outperformed Titan during the same period, raising concerns among analysts. Additionally, Goldman Sachs predicts that Titan’s jewellery margins are likely to weaken, adding further challenges for the company in the near term.
Morgan Stanley on Titan
According to Morgan Stanley’s latest report on Titan, the firm has maintained an “equal weight” rating on the stock, with a target price set at Rs 3526 per share. The report highlights a slow single-digit growth in Q1 top-line figures.
Falling below estimates primarily due to an 8% growth in Titan’s Indian jewellery business, which was significantly lower than the expected 20%. Morgan Stanley suggests that given these conditions, Q1 jewellery margins are likely to disappoint compared to their target estimate of 11%.
Stock Performance of Titan Company in last one year
In terms of stock performance, Rajratan Global Wire faced a mixed bag of results. In the last month, the stock has given negative returns of 8.17%, showcasing a modest downward movement. Contrastingly, the past six months were challenging, with the stock experiencing negative returns of 15.20%, indicating a period of decline.
Year-to-date figures continued in negative territory, depicting a decline of -14.53%. However, over the last twelve months, the stock managed to maintain positive returns of 3.19%, highlighting its resilience in the longer term.
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