Titan Company (Buy)

Target: ₹4,026

CMP: ₹3,410.75

Titan Company’s Q3-FY25 print was in-line with our estimates while higher gold coin sales and lower studded have impacted margin. Console. Revenue/EBITDA grew at 25.2/7 per cent while PAT declined by 0.6 per cent respectively.

Jewellery division (excluding bullion sales) reported strong growth of 26.6 per cent led by wedding related purchases (29 per cent y-o-y growth) and healthy same store sales growth of 22 per cent y-o-y (higher growth in South & East followed by North & West).

Management alluded this to: higher gold sales led by lower custom duty, strong buyer growth (48 per cent new buyer) in lower ticket size (<₹100k); and double digit growth in watches (50 per cent growth in premium brand). Despite better performance, jewelry segment EBIT margin declined to 9.2 per cent (-240bps) due to one time custom duty loss of ₹250 crore , lower studded mix of 23 per cent along with higher solitaire sales and higher gold coin purchases. Management

maintained EBIT margin guidance of about 11-11.5 per cent range on standalone level in FY26E. By looking lower 9MFY25, we tweaked our estimates and retain Buy, with a DCF-based TP ₹4,026 (implying 47.6x 27E EPS).

Risks: irrational competition; lower demand and rising gold prices.