As per an ET report, in reaction to the favorable Q3 business updates, HSBC reaffirmed its buy recommendation for Titan Company’s stock.The brokerage also raised the target price to Rs 4,200, up from the previous Rs 3,900. HSBC acknowledged the strong year-on-year Q3 jewelry sales, which exceeded consensus expectations with a 23% growth. However, it noted a lag in the EyeCare division, while other segments performed well. HSBC commented that Titan’s consistent and strong results reinforce its structural appeal.
In the October-December period, Titan Company witnessed broad-based growth in revenue. The company expanded its footprint by adding 90 stores, bringing the total to 2,949 stores, compared to 2,859 at the end of the previous quarter.
Breaking down the numbers, the jewelry division reported a domestic growth of 21% year-on-year, driven by double-digit buyer growth and a modest increase in average selling prices. Notably, the growth in gold (plain) and coins outpaced studded sales growth, reflecting heightened consumer interest in gold despite elevated prices and market volatility. Titan actively implemented investment initiatives, including exchange programs and consumer offers during the festive season, contributing to sustained growth. The wedding segment also saw a slight year-on-year improvement.
Morgan Stanley, while maintaining an equal weight stance on Titan, set a target price of Rs 3,190 post-Q3 updates. Morgan Stanley highlighted the positive trend in jewelry demand compared to the general sluggishness in discretionary demand. Titan has achieved over 20% growth for the fourth consecutive quarter, outperforming the market. Morgan Stanley specifically commended Titan’s effective strategy of regular gold exchange programs.
Despite challenges in discretionary demand, Titan Company has delivered impressive returns, surpassing 50% in the last 12 months. This outpaces the Nifty, which yielded nearly 20% returns during the same period, establishing Titan as a strong player in the market.