INSUBCONTINENT EXCLUSIVE:
Titan Company shares crashed 5.5% on Tuesday, wiping out around Rs 900 crore from the billionaire Jhunjhunwala family's portfolio, after the
jewellery giant's Q1 business update fell short of Street expectations in a quarter marked by gold price volatility.The Jhunjhunwala family
holds a 5.15% stake in the Tata Group company
The selloff comes just days after another high-PE Tata stock, Trent, disappointed investors with lower-than-expected revenue growth,
business revenue (ex-bullion) up 17% YoY vs est
While the brokerage maintained its Overweight rating on the stock, it flagged the sharp miss in jewellery segment performance.Also Read |
Titan shares tumble 5% after Q1 business update fails to impress D-Street
Live EventsThe brokerage set a target price of Rs 3,876, citing
gold price volatility as a key factor that led to softer consumer purchases between May and mid-June.Gold prices surged approximately 35% in
Q1FY26, with a steep 15% spike within the quarter itself, creating a perfect storm for jewellery retailers
The volatility particularly impacted consumer behaviour between May and mid-June, leading to a slowdown in purchases despite some traction
during the Akshaya Tritiya period."In the high gold rate scenario, customers preferred lightweight and lower karatage jewellery," the
company said, noting that buyer growth remained flat year-on-year for both its premium TMZ brands and its online platform,
CaratLane.Brokerages turn cautiousCLSA maintained an Outperform rating with a target price of Rs 4,326, acknowledging that while the
and geopolitical tensions during the quarter.However, Emkay Global turned bearish, maintaining a Reduce rating with a target price of Rs
3,350."Given the risk to estimates, increasing competition, mushrooming LGD players, and a deteriorating RoIC profile, we maintain 'Reduce'
on Titan with a target price of Rs 3,350 (50x Jun-27E EPS)," the brokerage stated.JM Financial expects jewellery EBIT margin to compress to
11% (ex-bullion sales), down roughly 20 basis points year-on-year, and projects standalone EBITDA/PAT growth of 20%/19% YoY
stores, the high-margin studded sales are also under pressure, which typically see better traction during periods of rising gold prices,"
Emkay added.Beyond gold price volatility, Titan is facing growing competitive pressure with the entry of new players like Indriya in select
markets, along with expansion by existing rivals
The company is responding by narrowing the gap in gold pricing and making charges versus competitors, while also pushing gold exchange
programs and monthly instalment schemes to sustain business.Like-for-like domestic growth for Tanishq, Mia, and Zoya remained in the low
double digits, driven entirely by an increase in average ticket size rather than new customer additions
shares underscores the vulnerability of high-PE consumer stocks to earnings disappointments, especially as investors begin to reassess
premium valuations amid a challenging operating environment.Titan share price performanceTitan shares have delivered just 7% returns so far
in 2025 and are down 0.3% over the past six months
Over the last two years, the stock has gained only 10.5%
The company currently has a market capitalisation of Rs 3,08,479 crore.
