Titan Company Limited is one of India’s leading lifestyle and jewellery companies recently on an impressive growth curve. The company’s shares gained 3 per cent on January 7, 2025, reaching Rs 3,576 on its fifth consecutive day in that rhythm. This comes on the back of Titan reporting good performance in the third quarter of the fiscal year 2025 (Q3 FY25) with significant growth in its jewellery, watches, and eyewear segments. Analysts and brokerages have responded well to these results, making Titan an attractive stock for investors. This blog will discuss Titan’s Q3 update, what’s driving the company’s growth, and why analysts are bullish on Titan’s stock.
Titan’s Impressive Q3 FY25 Update: Key Highlights
Titan’s good performance in Q3 FY25 was characterized by strong growth in its core segments, especially in the jewellery segment. The company delivered a healthy 24% YoY growth in the December quarter, which directly impacted its stock price. Let’s break down the key highlights from Titan’s Q3 update.
1. Jewellery Segment: Leading the Growth
The jewellery business remains a growth contributor to the overall Titan stock, accounting for a YoY growth of 25%. The reason cited was robust festive demand and soaring gold prices alongside increased demand from the wedding season. As the jewel of the Tata conglomerate, its jewellery business houses the flagship Tanishq brand among other successful ones. This jewellery business also availed a sizeable boost during the quarter in the form of 69 added stores in this quarter alone and now at a total of 3,240 stores across the world.
The festive season, which usually generates a higher demand for jewellery, proved to be especially bountiful for Titan. Moreover, an increase in gold prices helped the consumer buy jewellery as gold is considered a good investment during times of uncertainty. As India’s wedding season peaked, many consumers shopped at Tanishq for high-quality traditional jewellery, hence the massive increase in sales.
In gold coins, the company saw strong growth at 48% YoY, as it indicates that customers are buying more gold not only for personal consumption but also as an investment. Furthermore, the studded jewellery business of Titan registered a growth of 21% YoY, which once again proves the diversified product lines are quite strong for the company.
2. Watches & Wearables: Mixed Performance
The watches and wearables segment of Titan also reported healthy growth at 13% YoY. Growth in this category was mainly driven by the demand for analogue watches, which grew by 19% YoY. The premiumisation trend continued to drive higher sales in this segment, especially during the festive period.
The wearables segment is facing some difficulties. Wearables are a very fast-growing category, but smartwatches and fitness trackers have faced some stress. Titan’s sales were downgraded 20% YoY in the wearables business, which should be attributed to market saturation and increased competition in the wearables space. At the same time, Titan is focused on premium watches, for example, from the Titan and Fastrack brands, hence it has not lost its solid position in the watch market in general.
3. EyeCare: Sustained Growth Despite Challenges
The EyeCare division of Titan, which includes the brand Titan Eyeplus, also performed well and recorded a growth of 17% YoY. Notably, the company in the quarter had to close three stores, making this all the more great because it showed how Titan was increasing the presence of its brand and driving in more customers to its eyewear.
As indicated above, the success of the division of EyeCare is attributed to the strategic objective of providing affordable options for eyeglasses, covering prescription glasses and sunglasses and lenses for contact prescriptions. In turn, Titan exploited the growth need for quality glasses, since now more people do develop awareness of caring for eyes concerning seeing well.
Retail Expansion and Overseas Expansion
Another important factor that has been driving Titan’s growth is its retail expansion strategy. In Q3 FY25, Titan added 24 net stores in India and opened new outlets in Seattle and Dubai internationally. International expansion is an important milestone for Titan, which aims to expand its global footprint and capture the growing demand for high-quality jewellery and lifestyle products outside India.
The company-owned and franchisee-operated strong retail network ensures its effective reach in a wide number of consumers through different markets. Expansion of presence in international markets, especially into regions with an Indian diaspora of sizeable scale, will prove to be the way to long-term growth for Titan.
a) Analyst Ratings and Price Target Upgrades
Soon after Titan’s Q3 results were out, a lot of prominent analysts and brokerage firms came out to increase their ‘Buy’ rating with positive views, which said the company has great prospects for growth. Now let’s discuss a few of them.
b) Motilal Oswal’s ‘Buy’ Rating
Motilal Oswal, one of the top investment banks in India, recommended a ‘buy’ call on Titan’s stock after it delivered a stunning Q3 update. The brokerage increased its target price on Titan to Rs 3,850, meaning that there is a potential upside of 11% from the last closing price of Rs 3,470 on the NSE. Motilal Oswal has a positive view of the stock of Titan as the company is witnessing strong growth in the jewellery business, expanding its retail network, and promising prospects.
Titan has a diversified business model, and strong performances in the company’s jewellery, watches, wearables, and eyewear have been reflected across these lines. Therefore, it will be well placed to deliver sustainable growth in the coming quarters. Its focus on premiumisation along with strategic international market expansion has set up the firm for success going forward.
c) Add Rating at InCred Equities
InCred Equities, another prominent brokerage, has also turned positive on Titan’s stock with an ‘add’ rating. The brokerage expects consolidated and standalone sales growth of 23% and 24% respectively for the third quarter, driven by healthy demand for jewellery, watches, and eyewear. However, InCred Equities did caution that Titan could face margin pressure due to elevated gold prices and volatility in diamond prices.
Despite the temporary pressure on the margin, the management of InCred Equities feels that with the brand value and the excellent product offerings at Titan, long-term growth shall continue. This leadership in jewellery coupled with watches and eyewear is a sound investment option for Titan.
d) Citi has rated the stock as Neutral.
On the other hand, Citi maintained a neutral call on Titan’s stock, with a target price of Rs 3,600 per share. Although Citi said that Titan was doing very well in jewellery, the brokerage also pointed out that growth in standalone segments such as watches and wearables had been mixed. Wearables have seen headwinds due to market stress, which may impact Titan’s overall performance in the short term.
Despite all these concerns, Citi is positive about the long-term prospects of Titan, mainly because of its leadership position in the jewellery market and continued expansion into new product categories and international markets.
Why Titan’s Stock is an Attractive Investment Option
Titan’s stock is increasingly becoming an attractive option for investors, and several factors contribute to its appeal:
- Strong Brand Equity: Titan has emerged as a leader in the jewellery, watches, and eyewear markets. Its premium brands, such as Tanishq, Fastrack, and Titan Eyeplus, have built a loyal customer base, driving consistent demand across product categories.
- Diversified Product Portfolio: The diversified portfolio of Titan allows the company to weather market fluctuations and capture growth opportunities in different sectors. The jewellery segment continues to be a strong performer, while the watches and eyewear segments provide additional growth avenues.
- Expansion in International Markets: Titan’s international expansion, mainly in countries having a large Indian diaspora population, is going to be a major growth driver in the future. The strength lies in the effective tapping of demand from across the world for high-quality jewellery and lifestyle products.
- Strong Financial Performance: Titan’s consistent growth in revenues and profits, driven by strong performances across its business segments, makes it an attractive investment option. The company’s ability to maintain healthy margins despite challenges in the jewellery and watch markets demonstrates its operational efficiency.
- Analyst Optimism: The positive ratings and target price upgrades from leading brokerages such as Motilal Oswal and InCred Equities reflect growing confidence in Titan’s growth potential. With a strong market position and a solid business model, Titan is poised to continue delivering strong returns for investors.
Conclusion: Titan’s Promising Future
At its peak, this company was reported to be at a significantly impressive Q3FY25. So far, as key growth trends in most businesses go, one has witnessed spectacular performances by such major Indian entities as Titan Companies. In line with a diversified portfolio of growing retail networks in India and, importantly, a healthy international growth plan, the Titans continue on this positive track as more analysts maintain the buy status, further lifting the price target.
This is an attractive investment in the lifestyle and jewellery sectors in terms of strong fundamentals and steady growth for investors. Although short-term issues in sectors like wearables are expected to continue facing some challenges, the long-term growth potential for Titan, driven by its strong brand equity and expanding market presence, makes the stock highly desirable to hold in a diversified portfolio.
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