Hold Titan Company: target of Rs 3400: ICICI Securities

ICICI Securities's research report on Titan Company

Titan's domestic jewellery business revenue growth continued to be strong (~25% YoY; LFL: 22% YoY) driven by gold jewellery with good performance in studded segment (+21% YoY, strong buyer growth in sub-100k price point) while solitaire segment continued to be muted (global price uncertainty), leading to ~100bps (~23%) reduction in the studded share. This led to ~100bps contraction in normalised jewellery EBIT margin which could continue to be under pressure. Further, the current phase of formalisation gains accruing more to competition (availability of growth capital) will likely keep relative revenue underperformance. We like management’s preference of growth over margins in the near term. Other businesses also continue to trend well. That said, both growth and margin are important for its valuations. HOLD.

Outlook

We largely maintain our earnings estimates for FY26; modelling revenue / EBITDA / PAT CAGR of 18 / 18 / 17 (%) over FY24-27E. Maintain HOLD with a DCF-based unchanged target price of INR 3,400. Key upside risk is lower competitive activity. Key downside risk is worsening of macro environment leading to demand slowdown.