Titan shares fall after Q3 business update. Should you buy/accumulate?

Studded jewelry reported higher growth than overall divisions led by activations driven by higher contribution from premiumsiation. In Q3, Titan added 111 stores across divisions/ formats. “We believe the continued sales momentum across business divisions would have positive impact on the organized Jewelry,” said brokerage Centrum which has remained positive on growth prospects for Titan shares and retains Buy with DCF-based target price ₹3,115 apiece.

“In line with our thesis as argued in our report, we expect continued strong uptick in revenue, as the demand is expected to be robust in going forward. We believe the continued sales momentum across business divisions would have positive impact on the organized Jewelry retail benefiting players like Titan. In addition, we expect strong demand momentum for Watches and Eyewear to continue given normalized consumer mobility. Further turnaround in the Caratlane, watches, and eyewear divisions and continuity in their profitability potential not yet priced in,” it added.

Meanwhile, analysts at Prabhudas Lilladher believe double-digit Jewelry sales growth shows market share gains despite tepid demand led by aggressive store expansion (22 in 3Q), focus on studded and lighter jewelry, new ranges in wedding segment and designs & campaigns to cater to regional tastes and preferences.

“Watches and wearables growth has been led by 3x+ growth in wearable sales, new launches and renovation of 81 WOT stores, which augurs well for coming quarters. We believe new businesses like Wearables, Taneira (Distribution and product range led), Carat lane (50% sales growth YoY) will continue to gain traction. We estimate 18% PAT CAGR over FY23-25 and arrive at a DCF based target price of ₹2875. We remain positive, however, expect back ended returns given rich valuations of 49xFY25 EPS. Retain Accumulate,” they said in a note.

Shares of Titan fell nearly 2% to ₹2,490 apiece on the BSE in Monday’s early deals.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.