Buy Titan, watch Trent: ICICI Direct’s Kaustubh Pawaskar on what’s next for Tata retail stocks – News Air Insight

The festive season may be bright for jewellery retailers, but not all Tata Group retail counters are glittering equally. Talking to ET Now, Kaustubh Pawaskar, Lead Analyst at ICICI Direct, said that while Titan Company has outperformed expectations in its Q2 update, Trent Ltd. has seen slower-than-expected growth, hinting at a possible near-term moderation before a likely rebound in the festive-heavy third quarter.

Trent’s growth slows to 17%, below expectations

Trent reported a 17% year-on-year rise in revenue, falling short of ICICI Direct and street estimates of over 20%.
Pawaskar attributes this slowdown to postponed consumer purchases ahead of the GST rate cuts and a high base effect from previous quarters.

“Same-store growth is likely in single digits, but the store additions should keep revenue stable,” he noted.
“With 50 new stores added in Q2 and guidance for 200 by year-end, growth momentum should pick up in the second half.”

Apparel and footwear, two categories that have underperformed for two years, could finally benefit from festive demand and GST-led tax relief, he added.

Second half crucial for Trent’s 25% growth target

To achieve its FY26 growth goal of 25%, Trent will need to deliver a strong 30% surge in H2, Pawaskar said.“If store expansion stays on track and festive sales deliver, the number is achievable,” he explained.However, the analyst cautioned that execution in the coming quarters will be key, especially as consumer sentiment normalises and discretionary spending patterns evolve post-GST reforms.

Titan’s 18% jewellery growth surprises Street

In contrast, Titan’s 19% revenue growth in its jewellery business impressed analysts and investors alike.
Despite high gold prices and a strong base from last year’s custom duty cuts, Titan reported steady demand and robust studded jewellery sales, which drove overall performance.

“Titan’s jewellery segment delivered far better than expected. The demand for festive and wedding-related jewellery remains strong, and gold price stabilisation could further support momentum,” Pawaskar said.

CaratLane, Titan’s online jewellery arm, reported 30% growth, highlighting the brand’s strength in premium and digital segments.

Margins to stay steady, Q3 momentum to be stronger

Titan expects its jewellery business margins to stay around 11% for FY26, even after higher ad and promotional spends during Q2.“Investors should look at full-year margins, not quarterly fluctuations,” Pawaskar advised.

With Diwali and the wedding season driving demand, Q3 is likely to be even stronger for Titan’s sales trajectory.

ICICI Direct maintains buy rating on Titan

ICICI Direct continues to maintain a ‘Buy’ rating on Titan with a target price of ₹4,150, seeing further upside potential if margins and festive sales surprise positively.

“Titan remains one of the strongest players in India’s luxury retail and jewellery segment,” Pawaskar said.

“For long-term investors, this is a stock worth holding given its brand strength, diversification, and steady margin guidance.”

Risks ahead

Both stocks face short-term headwinds — for Trent, the risk lies in muted apparel demand and execution of store additions; for Titan, volatility in gold prices remains a key watchpoint.

Still, with consumption picking up and GST reforms spurring discretionary spending, analysts believe H2 FY26 could mark a turning point for Tata’s retail story.