Titan shares tank 7% post Q4 results. Should you buy, sell, or hold?

EBIT for the fourth quarter rose 8% YoY to Rs 1,139 crore, while EBIT margins declined 95 basis points to 11.1%.

Also Read: Segment-wise, the total income for the jewellery business grew 19% YoY to Rs 8,998 crore. The Indian business rose 20% in the same period.

The watches and wearables business recorded a total income of Rs 940 crore, up 8% YoY. The domestic business grew 9% YoY in the same period.

Should you buy, sell or hold Titan Company stock? Here's what analysts say:

Goldman Sachs

The global brokerage firm has a Buy rating on Titan with a target price of Rs 3,950.

Goldman Sachs said strong revenue growth sustained but competitive intensity ahead will cap its margin expansion potential for FY25.

The brokerage firm also highlighted that while the jewellery segment continues to experience resilient revenue growth but is facing margin headwinds. Management anticipates maintaining the current margin range of 12-13%, according to the report.

UBS

UBS has a Neutral rating on Titan Company with a target price of Rs 3900.

UBS highlights margin pressures resulting from increased discounts and promotional offers. Additionally, it notes a persistently challenging demand environment coupled with sustained competitive intensity. Notably, the report underscores sluggish sales growth in the watches and wearables segment, with Caratlane's EBIT margin at 6.9%.

CITI

CITI has a Neutral rating on Titan Company with a target price of Rs 3,650.

CITI highlights Q4 profitability below expectations and indicates potential margin risks ahead. The EBITDA growth of 6% year-over-year missed CITI's estimate by 5%, although the profit after tax (PAT) was in line with expectations. The report underscores the company's prioritisation of aggressive growth (20%) over preserving margins. CITI anticipates the stock to remain under pressure in the near term.

Motilal Oswal

Motilal Oswal reiterated its Buy rating on Titan with a target price of Rs 4,100.

The near-term growth outlook appears subdued due to high gold inflation affecting demand sentiments, which is a typical trend during inflationary periods. However, despite the near-term jitteriness, the company remains aggressive in its growth outlook, driven by new store additions, attractive designs, and market share gains, Motilal said.

"TTAN also maintains a Jewelry EBIT margin of 12-13% for FY25. We will monitor the near-term consumption trend. However, due to competitive pressure on margins, we cut our EPS estimates by 6%/ 5% for FY25/26," it said.

Nuvama
Brokerage firm Nuvama downgraded Titan shares to ‘hold’ with a revised target price of Rs 3,867 from an earlier Rs 4,106 given the fact that the weakness in margins is likely to persist in the near term post Q4 results.

Nuvama estimated that the soreness in margins is likely to continue in the near future, especially in H1FY25. The firm cut down its FY25/26 PAT by 6%.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)