The stock rally comes on the back of UBS’ note highlighting the company’s attractive valuation, strong brand positioning, and potential for an earnings rebound.
UBS stated that Titan remains a compelling player in the Indian jewellery market due to its consumer trust, scale, and robust brand equity. While acknowledging concerns around lab-grown diamonds (LGDs) as a competitive threat, UBS cited its own Evidence Lab survey, which indicated that the LGD impact is likely to be manageable. It said Titan’s value proposition remains intact and competitive, with further upside likely driven by its strategic pricing and market position.
According to UBS, Titan is poised for a major rebound following two years of stagnation. The brokerage noted that the company has delivered approximately 20% jewellery revenue growth over the past two years despite elevated gold prices. UBS expects earnings to rebound strongly in FY26 and FY27, forecasting earnings growth of 46% and 21% respectively, following a subdued FY25. It added that Titan’s margin reset strategy to support consumer affordability amid gold price fluctuations has laid the foundation for future profitability.
The brokerage also pointed to Titan’s valuation, which it said trades at an approximate 6% discount to its five-year average price-to-earnings multiple. UBS values the stock at 60.9x NTM PE, compared to the previous median of 55.8x. It believes Titan’s strategy of waiting and watching the LGD landscape is a prudent approach, and that the stock’s current levels suggest a potential upside of nearly 25%.
Also read: Epack Prefab Technologies shares zoom 20% to new 52-week high as Q2 PAT spikes over 100%UBS highlighted that downside risks to its bullish outlook include a sharp rise in gold prices and margin pressures. However, with growth and margin levers in place, the brokerage’s upgraded rating and price revision reflect its expectation of strong medium-term performance.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)