Jewellery Stock to Buy Now for an Upside of 25%, Recommended by CLSA

Synopsis: Titan’s growth is driven by strong jewellery demand and rising gold prices, supporting revenue, while margin pressures and slower watches performance create near-term challenges.

The article examines Titan’s growth outlook, highlighting how strong jewellery demand and rising gold prices are driving revenue and profitability. It also discusses near-term challenges from margin pressures and moderate performance in watches and select segments.

With a market capitalization of Rs 8,116 crore, Titan Company Ltd’s shares are trading at Rs 4,005.75 per share, up by 2.67percent from its previous close. The company trades at an overvalued P/E of 70x compared to its Industry average, and has returned 166 percent in the last 5 years.

Brokerage’s View

CLSA maintains an Outperform rating with a revised target price of Rs 4,996, implying around 24.7 percent upside, supported by strong core growth and long-term brand strength.

Rationale

• Strong Jewellery Demand Drives Growth: Titan’s core jewellery segment continues to show robust growth despite fewer wedding days, reflecting sustained consumer demand and consistent market share gains. This resilience underscores the brand’s strong positioning and ability to attract buyers even in a competitive and seasonally impacted market.
• Gold Prices Provide Revenue Support: Higher gold prices, up 82 percent year-on-year and 21 percent quarter-on-quarter, are contributing to value growth in the jewellery segment. This tailwind supports overall revenue momentum, helping the company navigate short-term market volatility while maintaining steady top-line performance.
• Margin Pressure and Segment Normalization: Jewellery margins may see sequential softening due to higher discounts, a tactical move to boost volumes, without affecting long-term profitability. Meanwhile, the watches division is experiencing modest growth moderation, suggesting a normalization in discretionary consumer spending.

Jewellery-Centric Demand Strength Driving Portfolio-Wide Momentum

• Jewellery Drives Revenue Momentum: Titan’s core jewellery business led growth with around 40 percent year-on-year increase, supported by festive demand, weddings, and strong response to Tanishq’s exchange programs and premium collections, highlighting the segment’s continued dominance in the company’s overall revenue mix.
• Profitability and Diversified Growth: Robust EBIT growth was supported by operating leverage in CaratLane and core segments, with margins benefiting from scale and cost efficiencies despite higher gold prices. Watches, eyecare, and emerging businesses like bags and fragrances also contributed, balancing slower growth in smartwatches and select categories.

About the Company

Titan Company, a Tata Group venture, is India’s leading lifestyle manufacturer. It dominates the jewellery (Tanishq), watches (Titan, Fastrack), and eyewear markets. Recently, it expanded into premium fragrances and ethnic wear while strengthening its global footprint through the acquisition of Damas Jewellery in early 2026.

Financial Highlights: The revenue from operations grew by 43 percent to Rs 25,416 crore in Q3 FY26 from Rs 17,740 crore in Q3 FY25, and EBIDT grew by 62 percent to Rs 2,713 crore in Q3 FY26 from Rs 1,674 crore in Q3 FY25. Accompanied by a net profit growth of 72 percent to Rs 1,684 crore in Q3 FY26 from Rs 1,047 crore in Q3 FY25, resulting in an EPS growth of 61 percent to Rs 18.97 per share in Q3 FY26.

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