Titan shares in focus after Q3 PAT falls marginally. What should investors do?

Titan shares will remain in focus on Wednesday, January 05, after the consumer discretionary major reported a marginal dip (-0.6%) in its third quarter consolidated net profit to Rs 1,047 crore, even as the total income rose 25% YoY to Rs 17,723 crore.

The profit before tax during the quarter was flat at Rs 1,396 crore, mainly due to the impact of customs duty reduction on gold.

Titan said the custom-duty-related losses on the inventory (held at the time of the duty change) have been fully realised in this quarter and hence the profitability is lower to that extent.

“We are committed to investing in the growths of all our businesses and specifically the emerging ones to help them scale faster. We remain optimistic on our performance and hope to end the fiscal year with a good growth over FY24,” said CK Venkataraman, MD, Titan.

Consolidated EBIT for the third quarter rose 5% YoY to Rs 1,627 crore. However, EBIT margins contracted 177 basis points to 9.2%.

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Should you buy, sell, or hold Titan’ stock? Here’s what analysts say:

Macquarie

Macquarie has maintained an ‘Outperform’ rating on Titan with a target price of Rs 4,150.

The brokerage noted a slight EBITDA miss due to weak watch margins, while jewelry margins remained in line. It highlighted strong demand in the jewelry segment and stated that Titan aims to end FY25 with good year-on-year growth. However, sales in Taneira’s ethnic wear segment remained flat despite a large potential opportunity.

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Goldman Sachs

Goldman Sachs maintained a ‘Buy’ rating on Titan with a target price of Rs 3,900.

The brokerage noted that jewelry margins were ahead of estimates, and strong revenue growth momentum in the jewelry segment is expected to sustain. Wedding-related jewelry purchases saw a 29% year-on-year increase in Q3, while the acceleration in studded jewelry is expected to ease concerns regarding LGD. Additionally, watches and eyewear segments delivered strong growth. Goldman Sachs has also raised its EPS estimates for FY25, FY26, and FY27 by 1.6%, 2.4%, and 2.4%, respectively.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)