Despite the healthy numbers, analysts expect the company’s underlying growth in the jewelery sector, which accounts for almost 88% of total sales, to gradually moderate as higher gold prices and postponed festive buying weigh on demand.
Brokers largely expect Titan to report consolidated revenue growth of 10 to 13% year-over-year, with sales of non-precious metal jewelry up about 12 to 14%. The watch and eyewear divisions are also expected to post double-digit growth, driven by steady consumer demand.
JM Financial estimates organic sales growth of approximately 6% year-over-year, or 13% excluding precious metals, driven primarily by a 12% increase in jewelry sales (ex-precious metals), an 18% increase in watches and a 12% increase in eyewear. The brokerage expects jewelry stand-alone EBIT margin to be 11.1%, about 30 basis points lower than last year, given the impact of higher gold prices and a slower mix of studded jewelry.
Still, overall EBITDA and PAT are expected to rise 43% and 46% on a year-on-year basis respectively, largely due to the weak base effect of last year’s customs-related losses.
Kotak Equities also expects jewelry revenue to grow about 14% year-on-year, slower than the 25% growth a year ago. The company attributed this moderation to a sharp rise in gold prices between August and September, up 18% in just six weeks, which likely postponed some holiday purchases. However, early festive demand in southern markets is expected to have softened the impact. Kotak estimates that the share of studded jewelry will remain stable at around 30% year-on-year, marking the first sign of recovery in this segment after four quarters of decline. The brokerage expects 22% growth in watches, driven by continued demand for analogue models, and 14% growth in eyewear, supported by an expansion of retail presence and improving footfall. In terms of margins, Kotak expects the EBIT margin for jewelery (ex-precious metals) to remain stable at 11.3% on its own, aided by cost efficiency and a balanced product mix, offset by gold price inflation. Margins for the watch and eyewear segments are estimated at 16.5% and 10% respectively.
Nuvama sees Titan’s total revenue increasing 13% year-over-year, led by 8% growth in core jewelry sales and double-digit growth in other verticals. It expects jewelry EBIT margins to be close to 11%, reflecting subdued productivity amid high gold prices and a delayed festive demand cycle.
Motilal Oswal, meanwhile, expects a 14% year-on-year increase in standalone (ex-precious metals) sales and expects Tanishq’s like-for-like sales to rise by around 11%. The brokerage expects stable EBIT margins of around 11.5% in the jewelry segment and sees continued strength in CaratLane, whose revenue is expected to grow 25% year-on-year with flat margins of 7%.
While gold price volatility and delayed festive spending could limit upside potential in the short term, brokers remain bullish on Titan’s long-term growth trajectory, citing its strong balance sheet, brand value and diversified product portfolio.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
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