Titan continues to shine with strong growth prospects, consumer-centric approach: Report

Titan continues to shine: Luxury fashion accessories maker Titan Company remains optimistic about its growth trajectory and consumer-focused strategies, as highlighted during interactions with its senior management team, analysts said.

Despite challenges such as gold inflation affecting demand in March 2024, Titan has maintained steady growth in the preceding months. The company's expansion efforts, including the addition of approximately 340 jewellery stores in the last two years, reflect its commitment to enhancing its retail footprint and improving operational efficiency, brokerage firm Motilal Oswal said in a note.

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Notably, Titan has strategically reduced gold premiums compared to peers while safeguarding operating margins through other initiatives. Management remains confident in sustaining a healthy jewellery earnings before interest, taxes (EBIT) margin of 12-13 per cent amid increasing competition.

While Titan evaluates the potential of lab-grown diamonds (LGDs), it remains focused on its core strengths and consumer trust. The company's long-term growth outlook is bolstered by structural drivers such as urban population expansion, rising consumer base, and evolving consumer preferences, the Mumbai-based brokerage highlighted.

With a projected revenue compound annual growth rate (CAGR) of 17 per cent and strong earnings growth prospects, Titan's valuation reflects its superior competitive positioning and business moats. 

Additionally, the company's consumer-centric approach, diverse jewellery brands catering to various consumer segments, and robust franchise partnerships contribute to its resilience and growth potential.

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The company's multi-brand strategy, including brands like Mia, Caratlane, and Zoya, further solidifies its market presence and caters to diverse consumer preferences.

Despite near-term consumption trends, Titan remains well-positioned to capitalise on the growing preference for branded jewellers and sustain its robust growth trajectory. 

As the jewellery market continues to offer notable growth opportunities, Titan's agility, execution track record, and expansion initiatives position it favourably for continued success.

Given its strong fundamentals and growth prospects, Motilal Oswal analysts maintain a positive outlook on Titan Company, reiterating a ‘buy’ rating with a target price of Rs 4,300 per share.

Notably, Titan shares rose over 51 per cent in the past year. As of 10:50 am, shares of Titan were trading 0.37 per cent higher at Rs 3,775 per share.