Healthy demand will aid Titan grow its core business, resulting in 17% upside, Macquarie says

Shares of Titan Company Ltd. have a potential upside of 17% from their previous closing price as healthy demand in the jewellery segment may aid its performance, as per brokerage firm Macquarie.

The brokerage has an "outperform" rating on the stock with a price target of ₹4,150 per share. The stock ended the previous trade session at ₹3,539 apiece.

Macquarie wrote in its note that industry checks point to healthy demand in the jewellery segment in the first quarter despite elevated gold prices. While footfalls moderated in June, Macquarie said it expects Titan's jewellery segment will witness 21% sales/EBIT growth in the first quarter, it said.

Global gold prices hit a record high of over $3,500 per ounce in April as US President Donald Trump's tariff tantrums roiled global markets and increased appetite for haven assets like Gold. Prices continue to trade just below those all-time high levels.

The pace of customers adapting to lab-grown diamonds could be hit if the recent GIA certification changes for those are adopted by other certification agencies, Macquarie said, adding that demand recovery in mined diamonds, makes it hopeful of Titan's product mix remaining steady.

Titan's confidence in keeping the Jewellery business EBIT margin between 11% to 11.5% for the current financial year is further supported by the company's ability to counter competition through new launches. The strength in Titan's sales is now showing up in its EBIT, which Macquarie believes was missing over the last few years.

Macquarie said Titan's growth opportunity remains high given the jewellery industry's 13% compound annual growth rate (CAGR) over the last 15 years and the company's market share of 7%.

Of the 35 analysts that have coverage on the stock, 23 have a "buy" rating, seven have a "hold" rating and five have a "sell" rating.

Titan shares were up 2.3% to ₹3,608.5 apiece just after market open on Wednesday, June 25. The stock has gained 10.9% this year, so far.

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