Titan Company is expected to report 25% YoY revenue growth in Q3FY25, driven by strong festive demand, while net profit remains flat due to exceptional inventory losses.
Titan Company, a part of the Tata Group, is set to announce its earnings for the third quarter of FY25 on February 4, 2025. Known for its leadership in the Indian jewellery market, Titan is expected to report solid sales growth in the festive season, supported by strong demand during the wedding season. Analysts estimate the company will see a 25% year-on-year (YoY) growth in revenue, totaling approximately ₹16,168 crore. However, despite this revenue growth, net profit is anticipated to remain flat due to an exceptional inventory loss.
In the preview of its Q3 results, Titan has shown remarkable sales growth, with analysts forecasting a muted impact on profitability due to a one-time inventory loss linked to reduced customs duties. Despite this, the company is expected to benefit from robust consumer traction in its domestic jewellery and other retail segments.
Titan’s Expected Q3 Performance
Titan’s domestic jewellery sales are expected to increase by 25% YoY, driven by high festive demand, especially during Diwali. The growth is attributed to an uptick in gold prices and strong momentum in plain gold jewellery sales. The Watches & Wearables business is also expected to report a healthy growth of 13% YoY, while the EyeCare segment is forecast to grow by 17% YoY, propelled by increased e-commerce and retail activity.
Among Titan’s emerging businesses, the Fragrances segment is anticipated to show strong growth of 27%, while the Fashion Accessories business may see a decline of 20%, and Taneira is expected to remain flat YoY. CaratLane, Titan’s online jewellery platform, is estimated to grow 25%, driven by a 26% increase in the studded jewellery segment.
Analyst Expectations and Brokerage Insights
According to Motilal Oswal, Titan’s revenue from operations in Q3FY25 is projected to grow by 24%, excluding bullion. The brokerage expects a decline of 110 basis points in standalone jewellery EBIT margin due to a reduced share of studded jewellery sales, coupled with a ₹200 crore to ₹250 crore inventory loss. Meanwhile, Nuvama Institutional Equities has forecasted Titan’s net profit to decrease by 2% YoY, primarily due to the one-time exceptional loss. Nuvama projects Titan’s EBITDA to rise 11% to ₹1,622 crore, while EBITDA margins are expected to decline to 10%.
On the other hand, Kotak Institutional Equities expects a more optimistic outlook, with revenue growth of 22.3% YoY, bringing it to ₹15,958 crore. The brokerage expects one-time inventory losses of ₹275 crore, classified as an exceptional item. Adjusted profit after tax (PAT) is expected to rise by 19.2% YoY to ₹1,239 crore, with EBITDA rising 24.9% YoY to ₹1,819 crore.
Market Reaction
Despite the expected inventory losses and margin squeeze, Titan’s stock showed resilience in the market, with shares trading 0.75% higher at ₹3,579.20 on the BSE at 3:00 PM on February 4, 2025. Titan’s market capitalization stands at over ₹3.17 lakh crore.
Analysts remain optimistic about Titan’s long-term growth prospects, especially given its diverse portfolio spanning jewellery, watches, eyewear, and emerging businesses like CaratLane and Fragrances. The company’s performance during Q3FY25 underscores the strength of its brand and the continued expansion of its retail footprint across India.
