TITAN Q3 2024-2025 Call Highlights: Watches Shine, Jewellery Holds and International Expansion!

Titan Company Ltd., a leading Indian lifestyle brand, offering high-quality watches, jewelry, eyewear, and accessories, in its Q3 earnings call reported robust performance with jewelry division achieving 22% same-store growth despite gold price volatility, while maintaining the target EBIT margin of 11-11.5%. The company saw strong growth across both premium and affordable watch segments, with significant buyer expansion in Tier 2/3 cities. The jewelry division successfully maintained premium pricing over competitors and reported stable diamond prices for small stones, despite industry headwinds. The company’s success was attributed to targeting premium segments and leveraging strong brand partnerships, resulting in double-digit growth across all formats.

Titan showed mixed performance, with Q3 showing revenue growth of 25%, while profit showing a marginal 0.5% decline year-over-year. The jewelry segment consistently drove growth, while facing margin pressures due to custom duty-related inventory losses that were fully realized in Q3. Margin contraction persisted throughout the year with EBITDA falling from 11.2% to 9.4% in Q3, while EBIT margins contracted 177 basis points to 9.2%. Notable bright spots included international jewelry growth of 64%, Caratlane’s expansion of 27% growth and 19 new stores, strong festive season performance of 28% secondary sales growth, and resilient analog watch sales with 20% growth that helped establish a strong FY25 growth trajectory despite earlier challenges.

Continue Reading: Discover the Vital Insights from Titan Company Ltd.’s Earnings Call!

Financial/Operational Metrics:

• Revenue: INR17,868 crore, up 25% YoY.
• Net Profit: INR1,047 crore, down 0.5% YoY.
• Basic EPS: INR11.80, down 0.8% YoY.
• Total Expense: INR16,472 crores, up 27.4% YoY.

Outlook:

• Growth Sustainability: Expects strong consumer demand in FY26.
• Lab-Grown Diamonds Impact: No significant impact yet, but market tracking ongoing.
• Patent Expirations: Expected to drive growth in the generics segment.

 

 Analyst Crossfire:

• Jewellery Margins & Gold Price Impact, Analog Watches Growth Strategy (Aditya Soman – CLSA): The sharp rise in gold prices has affected gross contribution and EBIT margins. Titan aims to maintain annual EBIT margins between 11% to 11.5%, focusing on absolute profit growth rather than percentage-based margins. Premium watch brands like Edge, Nebula, and Xylys grew over 50%, while affordable brands Fastrack and Sonata saw 33% and 24% growth, respectively. The company is seeing strong performance across price segments (Ajoy Chawla – CEO, Jewellery Division, Suparna Mitra – CEO, Watches & Wearables).

 

• Taneira Business Performance & Wearables Market Correction (Abneesh Roy – Nuvama Wealth): Despite flat sales growth, retail sales rose 30% and buyer growth was 38%. The focus is shifting to metros and Tier-1 cities, with an emphasis on new products at accessible price points. The wearable category is experiencing a market correction, allowing Titan to refocus on its strengths—consumer trust, design, and premium pricing. The impact of this strategic shift will be seen over the next 6 to 18 months (Ambuj Narayan – CEO, Emerging Businesses, Suparna Mitra – CEO, Watches & Wearables).

 

• Sourcing Loophole & Gold Pricing, Competitive Intensity in Jewellery (Devanshu Bansal – Emkay Global, Sheela Rathi – Morgan Stanley): The government’s crackdown on gold imports through alloys may help stabilize gold pricing, but Titan is not directly affected by such practices. While competition remains high, Titan focuses on customer acquisition and engagement rather than reacting to price fluctuations. Tier 2 and Tier 3 markets are outperforming metros, with 48% of buyers being new customers (Ajoy Chawla – CEO, Jewellery Division).

 

• Q4 Demand Trends & Gold Price Impact, Margin Threshold & Business Model (Amit Sachdeva – UBS Group): Q4 started strong, but international factors, especially in the US, have created fluctuations in gold prices. Customers are waiting for price stability before making purchases. Titan remains confident in long-term growth despite short-term volatility. Titan prioritizes maintaining annualized EBIT margins above 11%, considering it a threshold level. The company focuses on revenue growth while keeping profitability within an acceptable range (Ajoy Chawla – CEO, Jewellery Division; C.K. Venkataraman – MD, Titan Company).

 

• Competitive Store Expansion & Pricing Strategy (Tejas Shah – Avendus Park Institutional Equities): Titan has seen increased customer acquisition when lowering gold price premiums. The company actively monitors competitor store openings and counters them with stronger product offerings, enhanced visibility, and customer engagement (Ajoy Chawla – CEO, Jewellery Division; C.K. Venkataraman – MD, Titan Company).

 

• CaratLane Margin Expansion & Diamond Pricing Trends (Harit Kapoor – Investec, Vivek Maheshwari – Jefferies): CaratLane’s recent margin improvements stem from strong like-for-like sales growth, product innovation, and optimized marketing strategies, leading to operating leverage gains. Wholesale prices for large diamonds have declined, but smaller stones, which form the bulk of Titan’s studded jewellery, have remained stable. Titan’s pricing strategy remains focused on brand value and product differentiation (Saumen Bhaumik – CEO, CaratLane).