Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Titan stock outlook steady as festive demand offsets margin dip—BofA

EditorEmilio Ghigini
Published 06-11-2024, 01:58 pm
TITN
-

On Wednesday, Titan Company (NS:TITN)'s share price target was lowered by BofA Securities from INR 3,800.00 to INR 3,550.00, though the firm maintained a Buy rating on the stock. The adjustment follows Titan's second-quarter fiscal year 2025 performance, which showed strong revenue growth but a sharper-than-expected dip in adjusted jewellery EBIT margin.

Titan reported a 24% year-over-year growth in total revenue and a 26% increase in jewellery (excluding bullion) revenue for the quarter. This success was attributed to a 12% rise in buyer growth, bolstered by robust demand for gold jewellery and coins/bullion, particularly after the customs duty cut. Studded jewellery growth remained in double digits, with non-solitaire jewellery performing well. However, sales of large size solitaire were impacted, potentially due to slower investment demand and global price uncertainty.

Despite the positive growth in revenue, Titan experienced a decline in its adjusted jewellery EBIT margin by 270 basis points to 11.4% in the second quarter. The drop in margin was primarily due to a weaker studded mix, which accounted for 30% of sales compared to 33% in the same quarter of the previous fiscal year, and increased advertising and promotion expenses.

Management at Titan highlighted that the jewellery growth momentum continued into the festive season, indicating a sustained consumer interest in the company's offerings. The lower margin has been a point of focus, as it diverged from the otherwise strong top-line performance of the company.

In summary, while BofA Securities has reduced the price target for Titan Company, the firm's outlook remains positive with a continued Buy rating, reflecting confidence in the company's market position and growth trajectory despite the recent margin pressures.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.