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Strong growth outlook but expect back ended returns

We continue to remain constructive on TTAN given

1) healthy jewellery demand outlook

2) Jewellery margin guidance of ~11% despite elevated competitive intensity

3) strong order book in TEAL in both machine automation and aerospace. We believe jewellery EBIT margins are no longer a drag, post correction of past 2 years. While volatile elevated gold prices may impact volumes, we expect 2Q to witness strong value growth as prices will be higher by 45-50% at current gold pics. Titan 1Q numbers were largely in line with our estimates (ex custom duty gains) with jewellery continuing its strong performance despite headwinds (Adhik maas & increased custom duty) as festive demand remained resilient.

TTAN’s long term outlook too remains positive given

1) TTAN will likely be a gainer as higher gold prices give advantage in souring and inventory funding and consumer shift to branded chains accelerates

2) Success in light weight jewellery (9k and 14k) in Mia/Caratlane and 18k jewellery in Tanishq and Be-Yon in the LGD segment to cater to value seeking consumer

3) emergence of Caratlane and TEAL as new growth contributors. We estimate 25.6% EPS CAGR over FY26-28. We value Caratlane/TEAL at Rs278/162 per share and arrive at SOTP based target price of Rs5408 (Rs5209) as we rollover to June28. Although we expect back-ended returns due to sharp upswing of past few months, LT outlook remains positive. Retain Buy,

Jewellery

revenues grew by 24.4% YoY to Rs161.77bn; EBIT grew by 41.0% YoY to Rs18.61bn (Ex- Rs3.86bn gain amidst custom duty cut). EBIT margins ex of bullion was 11.7%. Bullion sales were 3.02bn in 1Q down 95.1% QoQ. Studded ratio at 27% flat YoY. Tanishq added 4 stores, taking the total to 532 stores. Gold jewellery sales increased by 35% while studded sales increased by 34%. Amid custom duty change from 6% to 15%, Tanishq witnessed strong traction in exchange led proposition with an average ticket size growth of 31% YoY.

Watches and Wearables

revenues grew by 21.7% YoY to Rs15.38bn; EBIT increased by 3.1% YoY to Rs2.95bn (exsharp one-time gain in base quarter due to inventory valuation, EBIT grew 16%). Analog witnessed growth in midtwenties YoY driven by healthy volume and ASP growth. Titan brand saw double digit growth, Fastrack sustained double digit value growth. Helios brand grew on similar levels with analogue segment led by premium international brands and in house brands. Smart watches saw single digit decline YoY, due to ASP decline of low double-digit YoY. The same store retail growth for Titan world/ Helios/ Fastrack/ LFS was 13%/ 33%/ 10%/ 18% respectively. Titan World/ Fastrack/ Helios/ Helios luxe added 9/ 9/ 14/ 2 new stores respectively.

Eyewear

revenues grew by 21.6% YoY to Rs2.87bn; EBIT grew by 24% YoY to Rs260mn; margins contracted by 16bps YoY to 9.1%. Titan eye + and Runway opened 6 and 1 new store respectively during the quarter. Eyewear segment witnessed double digit ASP growth in 1Q

Emerging business sales grew 20.4%; losses increased to Rs500mn:

Emerging Businesses (Taneira, Fragrances, Women's Bags) grew 18% to Rs1.28bn YoY. The combined losses increased to Rs390mn from Rs140mn in Q1FY26. Women's Bags delivered strong growth led by increased e-comm penetration. Fragrances grew midteens driven by volume expansion across Skinn and Fastrack perfumes. Taneira witnessed flattish revenue growth, with healthy consumer demand.

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