Titan shares focus as many retailers cut price targets for lower-than-expected Q2 results

Shares of Tata group’s jewelery watchmaker Titan were flat in the session on Wednesday (November 6) after the company’s weaker-than-expected Q2 showing. And as a result, many international brokerages have lowered their target price for the stock.

Net profit for the company in the September quarter fell 23% year-on-year (YoY) to Rs704 crore compared to Rs 915 crore in the same period last year. Zee Business Research estimates the company’s PAT at Rs 1,080 crore. The company’s profit fell despite a 16 percent rise in revenue to Rs 14,534 crore, from Rs 12,529 crore in Q2FY24. Analysts estimate that revenue will come in much lower compared to Rs 14,430 crore.

On the operational front, the company’s EBITDA for the reporting quarter also fell by 12 percent year-on-year to Rs 1,236 crore compared to Rs 1,411 crore in the same quarter last year. Estimates were highest at Rs 1,640 crore. Meanwhile, compared to the forecast EBITDA margin of 11.4 percent, the company’s margin decreased by 2.8 percent or 280 points to 8.5 percent during Q2FY25.

Here’s how global brokerages view Titan stock after Q2 performance

Goldman Sachs maintained its buy rating and lowered the price target on the stock to Rs 3,650 from its earlier target of Rs 3,750. The proposed target implies an upside of about 13 percent from the previous period.

Although the growth trend remains strong, there has been a reduction in margin guidance. According to the brokerage, the company posted strong growth in jewelry in Q2 and the holiday season in Q3 was also good. Company executives have noted that lab-grown diamonds have no material impact on their business. The company’s jewelery margins disappointed, with management lowering its FY25 margin guidance by around 100bps.