Titan Company shares drop 3% after Q2 results. Why Emkay, Nuvama and others remain bullish

Shares of Titan Company fell as much as 3% to their day’s low of Rs 4,697 on the BSE on Friday after the company reported a 54% year-on-year jump in consolidated net profit to Rs 1,722 crore for the September quarter, supported by robust demand across its jewellery, premium watches and eyewear businesses.

The growth came despite a shift in the festive calendar, with a large part of the festive demand moving to the December quarter. Titan had posted a net profit of Rs 1,120 crore in the corresponding period last year.

Consolidated total income, excluding bullion and digital gold sales and a non-operating accounting gain, rose 25% to Rs 20,533 crore from Rs 16,407 crore in the year-ago quarter.

Buy, sell or hold Titan shares?

Emkay has a Buy rating and a target price of Rs 5,600 per share. Emkay said Titan’s strong track record and healthy business outlook support the case for further valuation re-rating. The brokerage has largely retained its estimates, as the benefit of slightly better margins is offset by higher debt.

Titan’s reported EBITDA was around 25% higher than consensus estimates and 30% above Emkay’s estimates. This was supported by a benefit of around Rs 540 crore from the customs duty increase and a gain of around Rs 670 crore from the reduction in liability (option value) related to the acquisition of the remaining stake in Damas.

Domestic brokerage Nuvama maintained a Hold rating but raised the target price to Rs 5,479 per share. Nuvama said Titan's jewellery EBIT margin guidance remains unchanged at around 11% for FY27. The brokerage noted that the company continues to prioritise buyer growth, with a focus on its core jewellery business and affordable price points to offset slower growth in ticket sizes amid lower gold prices.

Stable gold prices could encourage customers who had deferred purchases to return to the market, supporting healthier buyer growth, Nuvama said. It expects competitive intensity to remain high, with Titan relying on its brand strength, product innovation and expansion of its retail network to sustain growth.

The brokerage added that healthy performance across businesses, supported by store expansion and operating leverage in non-jewellery segments, is expected to drive Titan's consolidated performance.

Antique maintained a Buy rating and a target price of Rs 5,538 per share. Antique expects Titan to deliver revenue and PAT CAGRs of 15% and 24%, respectively, over FY26-FY29. The brokerage remains confident of 17% CAGR in standalone jewellery revenue during the period.

It believes jewellery EBIT margins have bottomed out at 9.3% in FY26 and expects them to improve over the next three years. According to Antique, market share gains in jewellery, supported by strong brand equity, execution and store network expansion, will drive Titan's medium-to-long-term growth. Improving profitability across other business segments is also expected to support overall performance.

Titan Q2 business highlights

Jewellery continued to be Titan's biggest growth driver, with the segment reporting a 24% increase in revenue to Rs 17,495 crore, excluding bullion and digital gold sales. Demand for studded jewellery was particularly strong, recording growth in the early thirties in percentage terms. The performance was supported by the company's Festival of Diamonds campaign and promotional initiatives across its brands.

Titan said jewellery consumption remained healthy even as the festive calendar shifted towards the third quarter.

In India, the jewellery business registered 21% revenue growth to Rs 16,343 crore. The combined revenue of Tanishq, Mia and Zaya rose 20% to Rs 14,935 crore, while CaratLane continued to outperform, recording a 31% increase in revenue to Rs 1,408 crore.

Titan's watches division recorded one of its strongest quarterly performances, with revenue rising 27% to Rs 1,881 crore. Premium analogue watches remained the primary growth driver, registering an increase in the early thirties in percentage terms. Smartwatch sales also returned to growth, posting a high single-digit increase.

The eyewear business reported a 28% increase in revenue to Rs 281 crore. Titan attributed the growth to rising demand for premium products, improvements in its retail network and a wider product portfolio. The segment recorded EBIT of Rs 23 crore at a margin of 8.2%.

Commenting on the results, Titan Managing Director Ajoy Chawla said consumer demand remained resilient during the quarter despite a strong comparable base and the shift in the festive calendar.

"Q2FY27 was a quarter of healthy, broad-based growth for Titan, with our businesses registering c.25% consolidated operating growth YoY," Chawla said.

He said demand was supported by design-led jewellery collections and consumer offers, while premiumisation remained a key driver for the watches business.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here