Titan Company stock price target: According to Emkay Global, higher gold prices and more promotions will have an adverse effect on the company’s near-term EPS growth. However, the company appreciated Titan’s emphasis on share gains, given the solid growth potential of 20% CAGR.
Titan Company Ltd.’s Q4 results were below analyst expectations by 9–12% due to a jewelry margin failure of 70–100 basis points and a greater subsidiary loss. As a result, the company’s earnings projections for FY25 and FY26 were downgraded. Although the topline growth for jewelry was a robust 20%, experts pointed out that the margin shortfall was caused by intense competition and a larger gold mix in sales of jewelry with stones.
According to Emkay Global, higher gold prices and more promotions will have an adverse effect on the near-term EPS growth.
However, given the solid growth projection of 20 percent compound annual growth, we prefer Titan’s emphasis on share gains rather than near-term margin. Titan maintained its forecast of a jewelry EBIT margin band of 12–13 percent, but Emkay noted that the band will likely remain at the lower end as Q1 is expected to miss it by a significant margin.
Due to short-term margin pressure, this brokerage has lowered its earnings projections by 5–6%; yet, it still advises investing in any notable declines. Emky recommended a reduced price target for Titan stock, Rs 4,150.
According to Nuvama, the two consecutive quarters of lower jewelry margins (12.2 percent versus an expected of 13 percent) were the cause of the 9 percent deviation in consensus earnings. With a revised target price of Rs 3,867 (formerly Rs 4,106), it downgraded the company to ‘HOLD’ from ‘BUY’ and reduced FY25E/26E PAT by 6% each, citing the likelihood that margin contraction will persist in the near future, particularly in H1FY25.
According to Motilal Oswal, the demand sentiment that is typically present during inflationary periods is being affected by high gold inflation, which appears to be a muted factor in Titan Company’s near-term growth prospects.
The company stated that despite the short-term nervousness, it is still optimistic about its expansion, which will be fueled by the opening of new stores, appealing designs, and gains in market share.
Titan also keeps its jewelry EBIT margin at 12–13% for the fiscal year 2025. We’ll keep an eye on the short-term consumption pattern. However, we reduced our EPS expectations by 6%/5% for FY25/26 due to margin pressure from competition. Motilal Oswal stated, “Reiterate BUY with a target of Rs 4,100.”