Titan Share Price Slides Over 2% on Weak Q1FY25 Performance Amid High Gold Prices
News Mania Desk/Agnibeena Ghosh/9th July 2024
Titan Company’s stock witnessed a decline of over 2% in early Monday trade following disappointing Q1FY25 results, particularly in its jewellery business. The Tata Group-owned company reported a modest 9% year-on-year (YoY) growth, falling short of market expectations. Titan shares dropped as much as 3.46% to ₹3,156.15 on the Bombay Stock Exchange (BSE), marking the fifth consecutive trading session of decline.
In its quarterly update, Titan highlighted that domestic jewellery operations grew by 8% YoY, impacted by subdued consumer demand exacerbated by soaring gold prices and a reduced number of wedding days. The growth primarily stemmed from higher average selling prices, while buyer growth remained sluggish in low single digits.
Meanwhile, the Watches & Wearables segment showed resilience with a 14% YoY growth in domestic business, driven by a robust 17% increase in analog watch revenues. However, Wearables experienced a decline of 6% YoY.
Titan’s Eyewear division posted a modest 3% YoY growth, supported by its expansion into affordable fashion eyewear, which boosted volume growth.
During the quarter, Titan expanded its retail footprint by adding a net total of 61 stores, bringing its total retail network to 3,096 stores across various formats.
Despite the Q1FY25 performance falling short of expectations, Antique Stock Broking remains optimistic about Titan’s long-term prospects. The brokerage firm maintains a ‘Buy’ recommendation on Titan shares, forecasting a sales and earnings compound annual growth rate (CAGR) of 21% and 28%, respectively, from FY24 to FY27E. Antique Stock Broking set a target price of ₹4,490 per share, underscoring Titan’s potential to capture market share across regions, particularly in the South.
However, recent downgrades by Kotak Institutional Equities have impacted market sentiment. The brokerage downgraded Titan shares to ‘Reduce’ from ‘Add’ and slashed its target price to ₹3,075 from ₹3,600 per share. Kotak cited multiple margin challenges and heightened competitive pressures, exacerbated by the launch of Aditya Birla Group’s Novel Jewels and potential impact on Tanishq’s studded jewellery segment.
Reflecting the market’s response, Titan shares have declined by over 8% in the past month and 16% over the last three months. Year-to-date, the stock has fallen by more than 14%.
As trading continues, market observers are closely monitoring Titan’s strategies to navigate through current challenges in the jewellery sector amidst competitive dynamics and economic uncertainties.
