Titan Q1 Result Review: Analysts See International Segment, Jewellery Leading Growth

Titan Co.'s net profit in the first quarter of fiscal 2025 fell, despite a rise in revenue. Analysts are cautious due to expansion among competition. However they are optimistic on growth in the second quarter on the back of reduced import duty, pent-up demand and expansion plans.

The company's net profit fell 5% year-on-year to Rs 715 crore in the first quarter of fiscal 2025, missing analysts' estimates. The watch maker's margins contracted to 9.4% from 9.5%.

However, its revenue rose 11.5% YoY to Rs 13,266 crore, beating the Bloomberg estimate of Rs 12,642.7 crore. Its Ebitda also rose 11% to Rs 1,247 crore.

High gold prices, fewer wedding days, and a heatwave contributed to the overall decline in revenue, according to Emkay Global.

In the jewellery segment, Ebit margins improved by 20 bps to 11.2% due to cost optimisation. The India business grew by 8% year-over-year, with CaratLane showing an 18% growth.

The company is also focusing on lab-grown diamond inquiries and remains confident of certifying natural diamonds over LGDs.

Citi maintained a 'neutral' rating on the stock citing store expansion of peers. However, Nuvama had a 'buy' rating on the stock as it sees international business and the Mia and CaratLane brands driving growth.

Here is what brokerages have to say about Titan's first quarter performance.

• Maintains 'neutral' rating with target price of Rs 3,510 per share, implying an upside of 1.7%.

• Absolute valuations remain high

• Competition due to store expansion by existing players and entry of new player (Novel Jewels by Aditya Birla) are risks.

• Slowdown in the pace of market share gain and margins/earnings downgrade are also risks.

• Has a 'buy' rating on the stock with a target price of Rs 3,955 per share, implying an upside of 15%.

• Next levers of growth would come from the scale up of international segment, Mia and CaratLane.

• Titan had outlined a 15% CAGR target for the jewellery segment till FY27.

• Building in a revenue CAGR of 16.6% in jewellery segment till FY27.

• Factors in margins of 12% in jewellery, as guided by management in.

• The brokerage has maintained a 'buy' rating on the stock with a target price of Rs 4,000 per share, implying an upside of 15%.

• Despite a weak Q1, Q2 trends show pent-up demand with reduction in import duty and studded activation boosting sales.

• Standalone revenue grew 9% (ex-bullion), driven by 15% growth in watches, moderate growth in jewellery, and slower growth in eyewear/emerging segments.

• High gold prices, election-related restrictions, fewer weddings, and heat waves impacted footfalls and overall growth.

• Ebit margin guidance remains at ~12%, with Q1 gains led by cost optimisations and stable gross margins, international jewellery contributed ~3% to sales.

• Titan added new stores for Tanishq, Mia, Zoya, and CaratLane, with plans for 40-50 new Tanishq stores and 20-30 refurbishments in FY25.

• Titan said it has largely maintained its market share among top jewellery players and anticipates higher marketing spends due to rising competition.