The brokerage said Titan’s consolidated revenue growth (excluding bullion) rose 22% year-on-year in the September quarter, driven by robust jewellery demand aided by an early festive season and promotional offers. Jewellery sales grew 18.8% year-on-year, supported by the company’s “gold exchange offers and promotional activations amid higher gold prices.”
Management indicated that the strong momentum in October continued post-Diwali, supported by wedding demand and a 6% correction in gold prices that boosted buyer growth. Jewellery demand was higher in October aided by the festive season (Diwali) and the SSSG remained strong for the next 10 days as well, Nomura noted.
Margins remain steady despite gold price pressure
Standalone jewellery EBIT margins contracted 55 basis points to 10.8% due to an adverse mix from higher gold coin sales and discount offers. The management, however, reiterated its margin guidance band of 11–11.5%, noting it has “certain levers to manage the margin pressure” but cautioned that margins could face risks if gold prices stay elevated.
Nomura noted that watch sales grew 13% year-on-year, led by a 17% rise in analog watches, while EyeCare revenue rose 8.5%, driven by sunglasses. However, the EyeCare segment’s margins contracted sharply to 5.3% following a GST rate cut in September.
The brokerage expects 9M FY26 jewellery sales growth to surpass the 18% growth seen in the first half, as buyer growth is improving and demand has been sustained beyond the festive window.
Valuation comfort and risks
Nomura forecasts Titan’s earnings per share to grow at a 24% CAGR over FY26–28 and values the company at 60x Dec-27 forward earnings, in line with its 10-year historical average. “Titan trades at 1 standard deviation below its five-year trading average, thus providing valuation comfort,” the brokerage said.
The brokerage cited potential risks from persistently high gold prices, intensifying competition from regional players, and rising consumer preference for lab-grown diamonds, which could pressure margins and sales growth.
Titan, one of India’s largest jewellery and lifestyle retailers, operates brands including Tanishq, Mia, Zoya, CaratLane, Titan, Fastrack, and Titan EyePlus. The company’s shares have rallied amid strong consumer spending and market share gains in its jewellery business, particularly in South and East India, Nomura noted.
The company reported 59% year-on-year growth in consolidated net profit at Rs 1,120 crore in the second quarter of FY26, driven by early festive tailwinds, particularly in the jewellery segment. Sales in the reporting quarter rose 22% year-on-year to Rs 16,461 crore.
Also read | Titan Q2 Results: Profit soars 59% YoY to Rs 1,120 crore, sales up 22%
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)