Titan stock crashes over 4% as Q2 jewellery growth misses some estimates; brokerages retain bullish calls

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Titan Company shares fell more than 4 percent on Wednesday after its July-September quarter jewellery growth fell short of some expectations, with softer buyer growth and a shift in festive demand weighing on the quarter. However, brokerages retained bullish ratings on the stock, citing strong growth in studded jewellery and other businesses.

Titan shares were trading 4.4 percent lower at Rs 4,350 in early trade, making the stock the top loser on the Nifty 50. The decline was sharper than the broader market, with the Nifty down 0.7 percent at 22,621 at 9:22 am. The stock is still up 7.4 percent so far this year, compared with a 13.5 percent decline in the Nifty 50. Titan's market capitalisation stood at around Rs 3.86 lakh crore.

The company's domestic jewellery business grew 21 percent year-on-year in the second quarter of FY27. While CLSA said the growth was ahead of the consensus estimate of 19.3 percent, JPMorgan said it missed its own estimate of 25 percent.

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CLSA retained its 'Outperform' rating on Titan Company stock with a target price of Rs 5,590 per share, implying around 23 percent upside from Tuesday's closing price.

JPMorgan, which retained its 'Overweight' rating with a target price of Rs 5,540, had expected a negative stock reaction to the Q2 revenue miss. The brokerage cited muted buyer growth, lower gold coin sales and the deferment of festive-season consumption.

According to JPMorgan, jewellery demand remained healthy in July and August, with estimated growth of more than 25 percent, before softening in September.

HSBC retained its 'Buy' rating with a target price of Rs 5,510. It said Titan's second-quarter sales were below expectations, partly because of the shift in festive timing, while buyer growth was slightly muted. The brokerage cut its jewellery revenue estimates by 1 percent.

Despite the near-term miss, the underlying business trends remained strong across several categories. Studded jewellery grew in the early 30s, outperforming plain jewellery growth of around 20 percent. Buyer growth was in the mid-single digits, while average ticket sizes increased at a double-digit pace.

Tanishq, Mia and Zoya together registered growth of 20 percent, while CaratLane grew 32 percent. Titan's watches business accelerated to 30 percent growth and EyeCare to 28 percent. International business surged 97 percent year-on-year, while Titan's overall domestic revenue increased 22 percent.

CLSA struck a relatively more positive note, saying demand remained healthy for most of the quarter, with some softening as festive demand shifted into the third quarter. HSBC expects Titan's product mix to improve, helped by lower gold coin sales and a higher contribution from studded jewellery.

Titan had said in its quarterly business update released on Tuesday evening that Damas, in which it acquired a 67 percent stake last year, was showing early signs of recovery.