Titan stock drops more than 7% as Q4 results fell short of expectations: As stated by brokerages

Titan Company’s stock fell more than 7% after the company revealed weaker-than-expected March quarter earnings. On the NSE, the share price fell by 7.57%, reaching an intraday low of Rs 3,285 a share

Titan business’s stock fell more than 7% during Monday’s early trading session after the business released lower-than-expected March quarter earnings. Titan Company’s shares fell 7.57%, hitting an intraday low of Rs 3,285 per share on the NSE.

Titan announced a 5% year-over-year (YoY) improvement in consolidated net profit for the quarter ending on March 31, 2024, after market hours on Friday, May 3. Additionally, the quarter’s total revenue increased by 22% YoY to Rs 11,472 crore.

The quarter saw a 10% YoY increase in the company’s EBIT, which came to around Rs 1,192 crore. The jewelry area experienced a 19% YoY gain in total quarterly income, coming in at about Rs 8,998 crore. Meanwhile, the watches and wearables segment saw an 8% YoY growth in total income, coming in at Rs 940 crore.

Titan Company Brokers
Titan Company: Kotak Institutional Equities
Kotak has changed its target price for Titan shares from Rs 3,750 to Rs 3,600 in light of its improved outlook. This change comes after a 90–110 basis point (bps) drop in the FY25/26E consolidated jeweler EBIT margin projection and a 5-8% drop in EPS estimates.

“We’ve reduced the jewelry EBIT margin by 90-110 bps and increased FY25–26E sales growth by 2%, which means we’ve had to reduce EPS by 5-8 percent. According to Kotak, “We project a 17% consolidated jewelry sales CAGR over FY2024–27E.”

Kotak’s valuation of Titan is predicated on a PE ratio of 60 times June 2026E. Kotak cautions that the stock is now priced for perfection and highlights the need of keeping an eye on the Aditya Birla Group’s impending jewelry business as well as the adoption of lab-grown diamonds in India.

Read also:-The Indegene IPO is now up for subscription: Should you bid?

Titan Company’s Motilal Oswal
With a target price of Rs 4,100, Motilal Oswal Financial Services kept its buy call on Titan shares. Titan’s status as its top consumer discretionary play in India was highlighted by the company. It did, however, lower its projections for earnings per share (EPS) for FY25E and FY26E by 6% and 5%, respectively.

According to Motilal Oswal, Titan’s near-term growth prognosis is muted. This is because rising gold prices have an impact on demand sentiment, which is a normal occurrence during inflationary times. In spite of this, the company continues to pursue an ambitious expansion plan, concentrating on adding new stores, creating eye-catching designs, and increasing its market share.

Motilal Oswal emphasized Titan’s commitment to meeting its current jewelry revenue target of 2.5 times FY22 revenue by FY27, implying a notable 20% compound annual growth rate (CAGR) during the period. Titan is expected to maintain a Jewelry EBIT margin projection of 12–13% for FY25.

Titan presently commands a market share of about 8% in a market valued at nearly Rs 5 lakh crore, and Motilal Oswal believes the company has enormous development potential.

JM Finance Regarding Titan Corporation
JM Financial kept its buy rating on Titan Company’s shares but lowered its target price from Rs 3,940 to Rs 3,825; it attributed the move to Titan’s lower-than-expected March quarter earnings.

While revenue met expectations, JM Financial reports that segment earnings missed by roughly 3% overall due to lower margins across the board, especially in jewels where the gross margin is lower and there is less operating leverage. The trading business observed that the watch and eyewear segments’ performance has been erratic and needs further monitoring before it stabilizes.

JM Financial issued a warning, pointing out that variables like gold price volatility, election-related events, and a decline in wedding dates could have an impact on short-term growth and profitability. It did, however, underscore Titan’s continued commitment to sustaining the growth of its jewelry segment over the entire year, restating its projected margin of 12–13%.