Titan shares fall 4% as weak Q1 update leads to target price cuts

Titan Company's shares dropped 4% on Monday due to lower-than-expected business growth, prompting target price cuts from global brokerages. The company reported varied performance in different divisions, with challenges like high gold prices affecting consumer demand.

Shares of fell 4% on Monday to the day’s low of Rs 3,128 on BSE after the company posted a lower-than-expected 9% year-on-year (YoY) business growth, which also led to target price cuts for the stock from global brokerage firms.

Brokerage firms Morgan Stanley, JPMorgan, and Goldman Sachs have the following target price for the stock:

Goldman Sachs
Goldman Sachs has maintained a buy rating on the stock, however, has cut the target price to Rs 3,700 from an earlier Rs 3,800.

Morgan Stanley
Morgan Stanley maintained an equal-weight rating on Titan with a target price of Rs 3,526.

JP Morgan
JP Morgan has downgraded Titan to neutral from overweight and cut its target price to Rs 3,450 from Rs 3,850.

Q1FY25 updates

The company’s jewellery domestic operations grew nearly 8% YoY. However, high gold prices (20% growth YoY) and their continued firmness had an impact on consumer demand.

Watches & Wearables domestic business grew c.14% YoY. Revenue growth in Analog came in at a healthy 17% YoY whereas Wearables witnessed a decline of c.6% YoY. The division added 17 new stores (net) in the quarter consisting of five stores in Titan World, five in Helios and seven in Fastrack respectively.

EyeCare's domestic business grew c.3% YoY, while the emerging business, Taneira's revenue grew around 4% YoY. Taneira opened 4 new stores during the quarter, while Caratlane opened 3 new domestic stores, and witnessed a business growth of 18% YoY.

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Source: Stocks-Markets-Economic Times