Titan Company Share Price Target at Rs 3,752: Prabhudas Lilladher Research
Titan Company has once again showcased its resilience in the face of macroeconomic headwinds, reporting a strong Q4FY25 performance driven by robust value growth across its core segments. Prabhudas Lilladher has reaffirmed its BUY rating on the stock, citing a stable margin outlook and consistent growth momentum, while raising its target price to Rs3,752 from Rs3,695. The company’s strategic focus on lighter jewellery, premium watch brands, and emerging categories continues to pay dividends, despite the challenges posed by elevated gold prices and global uncertainties.
Jewellery Segment Anchors Performance with Strong Growth
Jewellery revenues grew 19.5% YoY to Rs121bn in Q4FY25, supported by higher gold prices and consumer demand for value-oriented products. While studded jewellery faced pressure (down 3% YoY in mix), the shift toward lightweight gold ornaments helped offset margin compression. EBIT from jewellery rose 22.2% YoY to Rs13.3bn, with margins improving by 20bps to 11%.
Despite rising input costs, Titan managed to leverage hedging gains and operating efficiencies to protect profitability. The opening of four new Tanishq stores during the quarter brought the total count to 519, reaffirming its aggressive retail expansion.
Watches and Wearables Deliver a Strong Margin Surprise
The watches segment posted a 19.8% YoY growth in revenue to Rs11.2bn, driven by analog watches and strong brand traction for Fastrack and Sonata. Premium international brands contributed significantly, registering double-digit growth. EBIT jumped 66% YoY to Rs1.3bn, with margins expanding sharply by 330bps to 11.8%—a strong recovery from the base effect and improved operational leverage.
Eyewear Rebounds with Margin Expansion
Eyewear revenues grew 15.7% YoY to Rs1.9bn, led by impressive gains in sunglasses and international brands. The segment’s EBIT more than doubled to Rs200mn, with margins climbing 560bps YoY to 10.4%. Though 11 stores were closed on a net basis, the store network remains robust with 891 outlets nationwide.
Emerging Businesses Show Mixed Trends
Titan’s emerging verticals delivered a 5.2% YoY growth, led by 26% growth in fragrances (SKINN and Fastrack) and 10% in women’s handbags. However, Taneira reported a 4% YoY decline. The company also piloted its first experiential SKINN store in Seawoods, Mumbai, highlighting a broader shift toward immersive retail formats.
Margin Outlook Steady Despite Inflation Headwinds
The management has guided for 11%–11.5% EBIT margin for FY26, factoring in elevated gold prices and global volatility. Titan plans to open 45–50 new stores and renovate an additional 50–60 outlets, reinforcing its commitment to omnichannel growth. Gold lease charges have stabilized, reducing the lease rate gap to just 70bps.
Key Financial Metrics and Valuation Updates
Standalone revenue (excluding bullion) grew 23.3% YoY to Rs135bn, with gross margin improving by 49bps to 21.7%. EBITDA rose 30% YoY to Rs14.4bn, and adjusted PAT stood at Rs8.7bn, ahead of expectations. Here’s a snapshot of key forward estimates:
| Metric | FY25 | FY26E | FY27E |
|---|---|---|---|
| Revenue (Rs bn) | 548 | 637 | 725 |
| EBITDA (Rs bn) | 53 | 70 | 81 |
| EPS (Rs) | 37.5 | 51.9 | 62.8 |
| RoE (%) | 21.3 | 24.8 | 24.8 |
| PE (x) | 89.9 | 64.9 | 53.7 |
Consumer Trends and Concall Highlights
Consumers are adapting to higher gold prices by shifting to lower caratage (9k–18k) and simpler designs with lower making charges.
Demand for smaller solitaires is increasing, while large-diamond buyers remain cautious.
Hedging strategies are effectively neutralizing margin pressures from an unfavorable product mix.
Lab-grown diamonds (LGDs) are seeing increased production, pressuring natural diamond prices.
Titan emphasized its bullish outlook on jewellery, targeting 15%–20% growth for FY26.
Risk Factors and Capital Allocation Concerns
Management flagged that continued rises in gold prices could necessitate higher capital investments in inventory, thereby impacting financing costs. Additionally, LGD pricing volatility and geopolitical factors may continue to influence consumer sentiment and margins.
Investor Takeaways and Target Valuation
Prabhudas Lilladher projects a 22.7% PAT CAGR over FY25–27, underpinned by strong brand equity, efficient cost management, and an expanding retail footprint. The brokerage values Titan on a SOTP basis and raises its target price to Rs3,752, maintaining a BUY call with robust confidence in the company’s fundamentals.
