Analysts Stay Bullish On Titan But Caution On Covid-19 Impact On Near-Term Sales

Analysts Stay Bullish On Titan: Analysts maintained their bullish ratings for Titan Co., citing higher-than-expected jewellery sales in the quarter ended March even as near-term sales could be impacted owing to localised curbs amid a surge in Covid-19 cases across the country.

The nation’s largest branded jewellery maker saw its revenue surge 60% year-on-year in the three-month period on a low base, according to its quarterly business update released on the bourses. That followed a record top line reported in the quarter ended December.

The jewellery business — that contributes nearly 80% of Titan’s overall revenue — continued to see strong sales momentum as a sharp decline in gold prices gave impetus to the consumer demand, Titan said. A large business-to-business gold coin order further strengthened growth.

Its margin, however, contracted because of a lower ratio of studded jewellery and higher share of coins over the previous year. A reduction in customs duty in February, too, hurt.

Still, most analysts expect the company to be well placed to capture the long-term growth potential in the jewellery segment, and that its other segments can emerge as key growth drivers in the years to come.

Shares of Titan gained as much as 1.4% in early trade on Thursday to Rs 1,535.8 apiece, snapping a three-day losing streak. Of the 32 analysts tracking the company, 15 have a ‘buy’ rating, 10 suggest a ‘hold’ and seven recommend a ‘sell’, according to Bloomberg data. The average of the 12-month consensus price target implies an upside of 3%.

Here’s a look at what analysts had to say on Titan post its business update:


  • Maintains ‘buy’ rating with a price target of Rs 1,800 apiece.
  • Q4 update suggests that jewellery sales were significantly ahead of consensus.
  • Update should increase confidence of Titan delivering strong growth in FY22 despite the second Covid wave.
  • Still in early parts of a high growth phase.
  • Looks well placed to capture value from the long-term growth potential in the jewellery sector.
  • Consistent market share gains and prospects of building new businesses make Titan a key structural buy.


  • Maintains ‘buy’ rating and a price target of Rs 1,650 apiece.
  • Jewellery segment growth has exceeded expectations and is likely to remain strong.
  • Lockdowns in Maharashtra, which contributes 15-20% of overall revenue, may see a short-term impact.
  • Strong momentum and pent-up demand will drive further upgrades to forecasts.
  • Remains preferred pick in the discretionary space.

Motilal Oswal

  • Maintains ‘buy’ rating with a price target of Rs 1,800 apiece.
  • Sales in the jewellery segment were far ahead of expectations.
  • Penetration in Tamil Nadu market is another positive development.
  • Recent sharp correction in gold prices bodes well for demand in the near term.
  • Watches & wearables, and eyewear divisions have also made good progress on recovery.
  • Margin outlook is expected to improve unless a second round of restrictions disrupt the business once again.
  • Structural investment case for Titan remains strong.

Prabhudas Lilladher

  • Upgrades to ‘accumulate’ from ‘hold’; raises price target to Rs 1,663 apiece from Rs 1,601.
  • Expects 45% volume growth in jewellery business on the back of correction in prices.
  • Spike in Covid-19 cases are likely to impact near-term sales.
  • Omni-channel strategy across jewellery, watches, eyewear will neutralise the impact to some extent.
  • Segments like Taneira, eyewear and entry into over the head headphones will emerge as major growth drivers.
  • Expects 34.5% PAT CAGR over FY20-23.
  • Long-term structural story remains intact.

Morgan Stanley

  • Maintains ‘equalweight’ rating and a price target of Rs 1,358 apiece.
  • Greater skew towards bull case reflects higher demand outlook for the jewellery segment.
  • Risks to upside: Faster-than-expected recovery in consumption, competitive pressure easing, favourable product mix.
  • Risks to downside: Increase in Covid-19 cases, increased price competition, increase in consumer promotions and discounts.
  • Save

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