Titan Company Stock
Ltd’s fourth-quarter results fell short of analyst estimates by 9-12 percent, with a 70-100 basis points margin miss in jewelry sales and increased losses in subsidiaries.
Consequently, there have been downgrades in earnings projections for FY25 and FY26. While jewelry revenue saw a healthy 20 percent growth, analysts attribute the margin miss to intense competition and a higher proportion of gold in studded sales.
Emkay Global noted that near-term EPS growth would be impacted by soaring gold prices and intensified promotional activities.
However, they expressed appreciation for Titan’s emphasis on capturing market share over short-term margins, citing a robust growth outlook of 20 percent compound annual growth rate (CAGR).
Titan Company Stock: Insights and Recommendations
Titan Company Stock reaffirmed its guidance for jewelry EBIT margin within the 12-13 percent band, although it’s likely to lean towards the lower end due to anticipated margin misses in Q1.
Despite reducing earnings estimates by 5-6 percent due to short-term margin pressures, Emkay recommended buying during significant corrections, setting a lower target of Rs 4,150 for Titan stock.
Nuvama attributed the 9 percent earnings miss to weaker jewelry margins, which stood at 12.2 percent compared to the estimated 13 percent for two consecutive quarters.
Anticipating continued margin weakness, particularly in the first half of FY25, Nuvama slashed its FY25E/26E profit after tax by 6 percent each and downgraded the stock from ‘BUY’ to ‘HOLD’, revising the target price to Rs 3,867 from Rs 4,106.
Motilal Oswal observed a subdued near-term growth outlook forTitan Company Stock due to heightened gold inflation dampening demand sentiment, a common trend during periods of inflation.
Nevertheless, despite short-term concerns, the company remains bullish on its growth prospects, driven by expansion of new stores, appealing designs, and market share gains.
They reiterated a jewelry EBIT margin target of 12-13 percent for FY25, while also revising EPS estimates downward by 6 percent and 5 percent for FY25 and FY26, respectively, due to competitive margin pressures.
Motilal Oswal maintained a ‘BUY’ rating with a target of Rs 4,100.