Titan share price: Titan shares fell more than 7% in morning session on the BSE on Monday, May 6, after the business disclosed weaker-than-expected March quarter earnings. Titan share price began at ₹3,481.10 versus its previous close of ₹3,535.40 and declined almost 7% to ₹3,287. Titan’s share price fell 5.75 percent to ₹3,332 at 10:15 am. The equity benchmark Sensex was 0.30 percent higher at 74,096 at the time.
Titan Company Q4 result
Titan reported a 5% year-on-year (YoY) increase in consolidated net profit of ₹771 crore for the quarter ending March 31, 2024, following market hours on Friday, May 3. Total revenues for the quarter increased by 22% YoY to ₹11,472 crore.
The company’s EBIT for the quarter increased by 10% YoY to almost ₹1,192 crore.
The Jewellery segment’s quarterly income increased 19% YoY to roughly ₹8,998 crore, while ‘Watches & Wearables’ overall income increased by 8% YoY to ₹940 crore.
Titan share price movement
Over the past year, Titan shares have surged by almost 29%, surpassing the Sensex benchmark, which has seen a gain of approximately 21% during the same period. On January 30 this year, Titan Company reached its peak for the 52-week period at ₹3,885 on the BSE. Conversely, its lowest point in the last 52 weeks was ₹2,666.55, recorded on May 5 the previous year. However, in the current calendar year, up to the close of May 3, Titan’s share price has declined by about 4%. Despite this recent dip, Titan’s performance remains noteworthy, demonstrating its resilience and potential within the market.
Should you buy, sell, or hold the stock?
Top brokerage firms have maintained their previous recommendations for Titan stock, however some have reduced their projections due to gold inflation and the stock’s fair valuation. Let’s see what some of them say.
Motilal Oswal Financial Services
Motilal maintains a buy call on Titan stock, targeting a price of ₹4,100. It stated that Titan remains its top consumer discretionary play in India. However, the brokerage company reduced its earnings per share (EPS) expectations by 6% and 5% for FY25E and FY26E, respectively.
The brokerage firm believes Titan’s near-term growth forecast is constrained due to rising gold inflation impacting demand emotions. This, however, is a common occurrence during inflationary periods.
“Despite the near-term uncertainty, the company remains aggressive in its growth outlook, driven by new store additions, appealing designs, and market share gains,” et al. Titan maintains a Jewelry EBIT margin of 12-13% for FY25. “We will keep an eye on the near-term consumption trend,” Motilal remarked.
Motilal stated that Titan is on track to meet the existing jewellery revenue projection of 2.5 times FY22 revenue by FY27, implying an exceptional 20% CAGR during the timeframe.
Titan has a market share of over 8% in a market worth nearly ₹5 lakh crore, indicating tremendous growth potential.
Kotak Institutional Equities
Kotak has adjusted its stance on Titan stock, now projecting a revised fair value of ₹3,600 compared to the previous ₹3,750. The adjustment comes alongside a reduction in the FY25/26E consolidated jewelry EBIT margin estimate by 90-110 bps, resulting in a 5-8 per cent cut in EPS estimates.
Their analysis indicates a revised outlook, with a 17 per cent consolidated jewelry sales CAGR anticipated over FY2024-27E. This growth is expected to be driven by various factors, including a 15 per cent domestic CAGR supported by nearly 9 per cent store growth, a remarkable 70 per cent CAGR in international business, and a robust 30 per cent CAGR in Caratlane.
Kotak’s valuation methodology pegs Titan at 60 times June 2026E PE. However, they caution that the stock seems to be priced for perfection. They advise monitoring factors such as the adoption of lab-grown diamonds in India, particularly their impact on Titan’s studded share, and also keeping an eye on Aditya Birla Group’s upcoming venture into the jewelry sector.
JM Financial
JM Financial has reaffirmed its buy recommendation on the stock but has revised down the target price to ₹3,825 from ₹3,940, attributing this adjustment to Titan’s underperformance in the March quarter compared to expectations.
While revenue met expectations, lower margins across various segments, particularly in jewellery, and the absence of operating leverage in other areas resulted in an overall shortfall of nearly 3 per cent in segment profits. JM Financial noted that the watches and eyewear segments displayed volatility, requiring further stabilization efforts before reaching a consistent performance level.
The brokerage firm anticipates that both growth and margins may face challenges in the short term due to factors such as fluctuating gold prices, the impact of elections, and a decrease in wedding dates.
However, JM Financial highlighted Titan’s commitment to sustaining growth momentum in its jewellery division for the full year and reiterated its guidance of 12-13 per cent margins.
“Titan stock could react negatively to weak Q4 results and near-term demand issues. From the long-term perspective, considering a large opportunity size and Titan’s superior execution capabilities, headroom for growth remains strong,” said JM Financial.
