Titan Company Faces Market Backlash

Titan Company shares experienced a significant drop of 5.5% on Tuesday, following a first-quarter business update that fell short of market expectations. This downturn resulted in a nearly Rs 900 crore loss for the billionaire Jhunjhunwala family, who holds a 5.15% stake in the Tata Group firm.

Underperformance in Jewelry Segment

The core jewelry segment was the main drag, with domestic revenue growing only 18% year-on-year, significantly below the anticipated 22–23%. Titan's flagship brands, Tanishq, Mia, and Zoya, posted a 17% growth excluding bullion sales, missing Morgan Stanley's estimate of 28%.

Challenges Ahead

Rising gold prices, which surged nearly 35% in Q1FY26, dampened consumer sentiment, particularly affecting sales from May to mid-June. Titan noted a shift in consumer preference towards lightweight and lower karatage jewelry amidst high gold rates.

Brokerages Turn Cautious

Emkay Global maintained a 'Reduce' rating, citing increasing competition and a deteriorating RoIC profile, while JM Financial highlighted pressure on high-margin studded sales. Conversely, CLSA retained an Outperform rating, praising the resilience of Titan's consumer business.

Strategic Moves

In response to competitive pressures, Titan is adjusting pricing strategies, enhancing exchange schemes, and introducing EMI options. The company also expanded its retail presence by opening 19 new stores across its brands during the quarter.

Despite these efforts, Titan's growth remains modest, driven more by higher average ticket sizes than an increase in new customers. With shares up only 7% in 2025, the company's market cap stands at Rs 3.08 lakh crore.