Titan’s Stock Sees Deep Cuts as Jewellery Business Growth Disappoints Investors
Titan’s Stock Takes a Hit as Jewellery Business Growth Slows in Q1 FY25
Investors were left disappointed as Titan, a Tata Group firm, reported sluggish growth in its jewellery business for the first quarter of FY25. The stock saw deep cuts, falling sharply by 3.46% to Rs 3,156.15 apiece on the BSE, marking the fifth consecutive trading session of losses.
According to Titan’s quarterly business update released on July 5, the company registered a year-on-year (YoY) growth of 9% in Q1FY25. However, its domestic jewellery operations recorded a modest 8% YoY growth, influenced by weakened consumer demand attributed to higher gold prices and fewer wedding days.
Titan highlighted that domestic growth primarily stemmed from an increase in average selling prices, whereas buyer growth remained in the low single digits. On the other hand, the Watches & Wearables segment showed a more robust performance with domestic business expanding by 14% YoY. Analog watches saw a healthy revenue growth of 17% YoY, while Wearables experienced a decline of 6% YoY.
The EyeCare division’s domestic business posted a 3% YoY growth, benefiting from its entry into affordable fashion, which contributed to volume growth in the category. During the June 2024 quarter, Titan added a net total of 61 stores, expanding its combined retail network presence to 3,096 stores.
Brokerages like Goldman Sachs and Morgan Stanley have also weighed in on Titan’s performance. Goldman Sachs revised Titan’s target price downward, citing maintenance concerns and disappointing Q1 revenue updates. Morgan Stanley maintained an “equal weight” rating on the stock, with concerns about slow single-digit growth and lower-than-expected jewellery sales.
In terms of stock performance, Titan faced a mixed bag of results in the last year, with negative returns in the short term but positive returns over the longer term. Investors are advised to consult qualified financial advisors before making any investment decisions.
