On Tuesday, Citi revised its price target for Titan Company (TTAN:IN), a prominent Indian retailer, reducing it to INR3,300 from the previous INR3,650. The firm maintained a Neutral rating on the stock. This adjustment follows a report on the company's recent performance, which showed a 9% year-over-year growth in jewelry sales, excluding bullion.
However, this growth was overshadowed by the stronger performance of competitor Kalyan Jewellers, which reported a 29% year-over-year increase.
The assessment by Citi highlighted several factors contributing to Titan's modest growth, including the impact of higher gold prices, fewer wedding days, and subdued consumer sentiment. Additionally, the analysis noted a low single-digit increase in buyers and a slight shift in consumer preference towards plain gold over studded jewelry, which indicated a marginal decrease in the studded mix.
Despite these challenges, Titan's store expansion in India has been robust with the addition of 11 new Tanishq stores. Nonetheless, CaratLane, a subsidiary of Titan, experienced a slowdown in growth to 18%, a decrease from previous quarters. Performance in other segments of Titan's business showed mixed results, with Watches & Wearables growing by 15%, EyeCare by 3%, and Emerging Businesses by 4%.
In response to these developments and the evolving competitive landscape, Citi has also adjusted its earnings per share (EPS) estimates for Titan for the fiscal years 2025 to 2027, reducing them by 1-2%. These revised estimates are 7-15% below the consensus.
Furthermore, the valuation multiple for the target price has been decreased to 55 times the estimated earnings for March 2026, down from 60 times. The report concludes with a maintained Neutral rating and a revised price target of INR3,300, with a note that Citi has an ongoing negative Catalyst Watch for the company.
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