Titan Company stock price target: Emkay Global said the near-term EPS growth will be hit by elevated gold prices and added promotions. But it liked Titan’s focus on share gains, as growth outlook remains robust, at 20 per cent CAGR.
Titan target price: Nuvam cut FY25 and FY/26 PAT by 6 per cent each and downgraded the stock to ‘HOLD’ from ‘BUY’ with a revised target price of Rs 3,867.
Titan Company Ltd Q4 results missed analyst estimates by 9-12 per cent on 70-100 basis points jewellery margin miss and higher subsidiary loss, leading to downgrades in its earnings projections for FY25 and FY26. Whereas jewellery topline growth was healthy at 20 per cent, the margin miss is a factor of high competition and higher gold mix in studded sales, analysts said.
Emkay Global said the near-term EPS growth will be hit by elevated gold prices and added promotions.
“But we like Titan’s focus on share gains (vs near-term margin), as growth outlook remains robust, at 20 per cent CAGR. Titan upheld its guidance of jewellery EBIT margin band of 12-13 p cent, which though would probably stay at the lower-end, as Q1 is likely to miss the band by a margin,” Emkay said.
This brokerage has cut its earnings estimates by 5-6 per cent on near-term margin pain but recommended buying into any significant corrections. Emky suggested a lower target of Rs 4,150 for the Titan stock.
Nuvama said the 9 per cent miss in consensus earnings was due to weaker jewellery margins (12.2 per cent versus estimate of 13 per cent) for two consecutive quarters. Given the weakness in margins to continue in the near term, especially in H1FY25, it cut FY25E/26E PAT by 6 per cent each and downgraded the stock to ‘HOLD’ from ‘BUY’ with a revised target price of Rs 3,867 (earlier Rs 4,106).
Motilal Oswal said the near-term growth outlook for Titan Company appears subdued due to high gold inflation affecting demand sentiment, which is a typical trend during inflationary periods.
Despite the near-term jitteriness, the company remains aggressive in its growth outlook, driven by new store additions, attractive designs, and market share gains, it said.
“Titan also maintains a jewellery EBIT margin of 12-13 per cent for FY25. We will monitor the near-term consumption trend. However, due to competitive pressure on margins, we cut our EPS estimates by 6 per cent/5 per cent for FY25/26. Reiterate BUY with a target of Rs 4,100,” Motilal Oswal said.
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