Titan Company Share Price Target at Rs 4,980: ICICI Direct
ICICI Securities has reiterated a BUY call on Titan Company, assigning a 12-month target price of Rs4,980 against the current market price of Rs4,259 — implying an upside of approximately 17%. The recommendation follows a robust Q3FY26 performance, powered by a resurgent jewellery business, accelerating traction at Caratlane, and resilient operating discipline despite elevated gold prices. Revenues surged 42% year-on-year, while adjusted profit after tax climbed nearly 46%, reflecting both pricing power and operating leverage. Management remains focused on sustaining absolute EBIT growth, even as product mix and bullion volatility pressure margins in the near term.
Jewellery: The Crown Jewel of Growth
Domestic jewellery revenues expanded 40.4% YoY to Rs19,921 crore in Q3FY26, driven by strong wedding demand, festive momentum, and compelling gold exchange programs. The segment benefited from higher ticket sizes, with the average transaction value reaching Rs1.9 lakh — the highest in several quarters.
While new buyer additions remained flat at 45% of the customer base, the premium end of the portfolio (>Rs1 lakh) demonstrated resilience. Plain gold jewellery recorded 37% growth, while studded jewellery advanced 26%. Notably, studded mix declined 200 basis points to 26%, reflecting gold-led skewness in demand.
ICICI Securities expects Titan’s domestic jewellery business to compound at 18% CAGR over FY25–28E, underpinned by brand equity, product refresh cycles, and strong exchange-led conversion.
Caratlane: Margin Expansion Ahead of Schedule
Caratlane delivered another stellar quarter, with revenues rising 42.2% YoY to Rs1,537 crore and EBIT margins expanding to 13% — up 121 basis points.
Studded jewellery, which constitutes 85–90% of its portfolio, grew 35%. New launches in 14K and 9K gold gained meaningful traction, enhancing affordability appeal amid volatile bullion prices.
Management expects double-digit EBIT margins to sustain, driven by operating leverage and cost rationalisation. ICICI Direct projects Caratlane revenues to grow at a 28% CAGR over FY25–28E.
Watches & Eyewear: Quietly Compounding
The watches segment reported 13% YoY revenue growth, with analog watches outperforming smartwatches significantly. Segment EBIT margins improved 480 basis points to 17.4% in 9MFY26, reflecting premiumisation and disciplined cost control.
Eyewear revenues grew 17.5%, driven by volume recovery and pricing gains. Management guided for 8–9% volume growth ahead, supported by premium brand traction and NRI demand tailwinds.
Margins: Managing Through Gold Volatility
Consolidated gross margins declined 225 basis points to 19.8%, pressured by higher gold prices and lower studded mix. However, EBITDA margins remained stable at 10.7%, aided by operating leverage.
Management reiterated its focus on absolute EBIT growth rather than margin percentage expansion in a high-gold-price environment. Consolidated EBITDA margins are expected to remain in the 10–11% band near term.
Financial Trajectory: Accelerating Earnings Visibility
Below is the revised earnings outlook based on ICICI Direct estimates:
| Particulars (Rs crore) | FY25 | FY26E | FY27E | FY28E |
|---|---|---|---|---|
| Revenue | 60,456 | 79,542 | 87,164 | 100,789 |
| EBITDA | 6,237 | 8,280 | 9,412 | 11,187 |
| Adjusted PAT | 3,738 | 5,074 | 5,892 | 7,263 |
| EPS (Rs) | 42.0 | 57.0 | 66.2 | 81.6 |
ICICI Direct forecasts revenue and PAT CAGR of 19% and 25% respectively over FY25–28E.
Valuation Framework: Premium for Leadership
The brokerage values Titan at 61x FY28E EPS of Rs81.6, arriving at a target price of Rs4,980.
Valuation multiples compress meaningfully over the forecast horizon:
| Valuation Metric | FY25 | FY26E | FY27E | FY28E |
|---|---|---|---|---|
| P/E (x) | 101.4 | 74.7 | 64.3 | 52.2 |
| EV/EBITDA (x) | 62.8 | 47.1 | 41.0 | 34.2 |
Return ratios remain compelling, with RoE projected above 31% through FY28E.
Strategic Catalysts
1. Wedding demand resilience: Non-discretionary wedding purchases support premium ticket growth.
2. Gold exchange programs: Over 50% of jewellery sales now stem from exchange schemes, insulating demand from gold volatility.
3. Caratlane scaling: Double-digit EBIT margins achieved earlier than anticipated.
4. International expansion: Damas acquisition (67% stake) strengthens Middle East footprint.
Key Risks
• Sustained inflation in gold prices
• Slowdown in discretionary consumption
• Increase in customs duty on gold
Investment View: Compounding Franchise with Earnings Visibility
Titan continues to demonstrate its structural moat — brand trust, scale economics, and execution discipline. Despite near-term mix pressures from bullion volatility, the company’s ability to sustain double-digit revenue growth while expanding absolute EBIT underscores its resilience.
ICICI Securities maintains a BUY rating with a target of Rs4,980 over 12 months.
