Buy Titan Company Ltd For Target Rs. 5,200 by Motilal Oswal Financial Services Ltd
Strong revenue growth; better than expectations Key highlights of Titan’s pre-quarter business updates for 4QFY26:
* Titan consumer businesses recorded ~46% YoY growth in 4QFY26.
* The company added 47 net new stores during the quarter, expanding its combined retail network to 3,603 stores.
Jewelry division
* The jewelry portfolio delivered ~46% YoY (est. 35%) growth in 4QFY26, supported by higher average ticket size.
* Secondary (consumer) sales remained robust, increasing ~52% YoY, led by Tanishq and supported by Mia.
* Like-to-like (secondary) sales across all jewelry formats recorded strong growth of ~48% YoY.
* Despite a sharp rise in gold prices, buyer growth improved to high-single digits after remaining largely flat in the previous three quarters.
* Category-wise performance: Studded jewelry grew in the early 30s, plain gold jewelry grew in the mid-30s, and coin sales nearly tripled YoY.
* The company added a net 27 stores in India during the quarter: 8 stores under Tanishq, 14 stores under Mia and 5 stores under CaratLane.
Watches & Wearables division
* The division reported ~7% YoY growth (est. 14%), driven by ~16% growth in analog watches, partly offset by a ~53% decline in the smartwatch segment.
* Growth in the analog category was led by Titan, Sonata, and international brands, indicating steady demand in both premium and entry-level segments.
* Ongoing premiumization trends supported an increase in average ticket sizes during the quarter.
* The division added a net 30 stores: 17 Titan World stores, 7 Fastrack stores, 4 Helios stores and 2 Helios Luxe stores.
Eyecare division
* The business recorded ~16% YoY growth (est. 16%), driven by strong performance of international brands across sunglasses, lenses, and frames.
* The division continued to optimize its retail network during the quarter by renovating 37 stores, closing 32 stores, and adding 12 new stores (net 20 store closures).
Emerging businesses (Fragrances & Fashion Accessories and Indian Dress Wear)
* The fragrance segment grew ~30% YoY, driven by strong double-digit volume growth in Fastrack and Skinn.
* Women’s bags recorded robust growth of ~47% YoY, supported by store expansion and healthy volume growth in both IRTH and Fastrack.
* Taneira sales fell marginally by ~1% YoY. ? Store network: IRTH added 6 stores and Taneira closed 1 store.
International business
* Titan’s North America business maintained strong momentum, registering ~50% YoY growth during the quarter.
* As part of leveraging the Damas network in the GCC region, 4 Damas stores were converted into Tanishq stores in 4QFY26.
* Sales were impacted in March by disruptions arising from the Middle East conflict, affecting both Tanishq and Damas stores.
* Despite these challenges, Tanishq’s GCC business delivered healthy growth of ~37% YoY for the quarter.
* Titan’s international business (including Damas) reported strong growth of ~156% YoY.
* Titan’s international store network: 149 stores in GCC region, 12 stores in North America (10 Tanishq stores and 2 CaratLane stores), 1 Tanishq store in Singapore.
* The GCC network of 149 stores comprises: 142 jewelry stores {18 Tanishq stores (including 4 converted stores), 1 Mia store, 123 Damas stores} and 7 Titan Eye+ stores.
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