Buy Titan Company; target of Rs 4000: Motilal Oswal

Motilal Oswal's research report on Titan Company

Titan Company (TTAN) posted consolidated sales growth of 25% YoY in 3QFY25 (in line). Standalone jewelry sales (excl. bullion) rose 26% YoY, driven by strong festive demand, higher gold prices, and a 29% surge in wedding purchases. Studded jewelry grew 21% YoY, though its mix declined by 100bp YoY to 23%. The non-solitaire segment saw healthy double-digit growth, while solitaire sales remained subdued. Net jewelry store additions stood at 46 in 3Q, bringing the total count to 1,055. Standalone Jewelry LFL growth was 22%, and CaratLane posted a robust 25% YoY growth. Standalone jewelry EBIT margin (excl. bullion, adjusted for customs duty) contracted 100bp YoY to 11.2% (est. 11.1%) due to a higher gold mix amid rising gold prices. However, CaratLane’s margin expanded 250bp YoY to 11.7%. Management reiterated its standalone EBIT margin guidance of 11- 11.5%.

Outlook

With the jewelry industry seeing faster formalization, we continue to believe TTAN will keep leveraging the same, driven by store additions, multi-format presence, better designs and customer understanding, and a strong recall of trust. We reiterate our BUY rating with a TP of INR4,000.

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