The share price of Titan is trading 1.48% lower today, February 6, at Rs 3,438.80. This comes after the company reported a 0.56% YoY decline in net profit, which stood at Rs 1,047 crore for Q3FY25.
Despite this dip, most brokerage firms continue to maintain a positive outlook on the stock, with expectations of margin growth and steady demand in the jewellery segment.
Let’s take a closer look at what brokerages are saying: Nuvama: Maintains Buy, revises target price to Rs 4,115
The brokerage firm Nuvama has maintained a ‘BUY’ rating on Titan. It has also maintained an 18% upside potential. Furthermore, the brokerage firm has revised Titan’s target price to Rs 4,115, down slightly from Rs 4,182.
According to the brokerage house, Titan’s strong Q3FY25 performance, driven by wedding season demand, is a key factor in this optimistic outlook.
“Secondary sales grew 28% YoY, with wedding-related purchases increasing by 29% YoY, and gold prices rising sharply,” the brokerage firm noted.
The brokerage further highlighted in its report that despite a high base effect from the previous year, Titan has managed to maintain its growth trajectory.
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“Rising gold prices, product mix, and competition are affecting margins, though the slight sequential decline in core-jewellery EBIT margins on a sharp fall in studded ratio is encouraging,” added the firm.
Apart from this, the brokerage firm also noted some key risks that investors need to keep in mind. The most pressing risk comes from the volatility in gold prices, which has a significant bearing on demand. It noted that the steep rise in gold prices could dampen demand and lead to a drop in margins.
“The jewellery business is highly seasonal, with demand peaking during the wedding season and festivals. Any changes in the timing or volume of weddings could impact Titan’s revenue during certain periods,” according to brokerage.
Regulatory hurdles, such as changes in customs duty and government actions to curb gold demand, also pose a potential threat to the jewellery division.
Motilal Oswal: Bullish on Titan’s growth with Rs 4,000 target price
Motilal Oswal remains bullish on Titan, maintaining a BUY rating with a target price of Rs 4,000.
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