Titan likely to see soft Q1FY26 as high gold prices hit buyer growth, margins

Wed July 30 2025

Retail major Titan is expected to report moderated growth in Q1FY26, despite a sharp 35% year-on-year increase in gold prices, analysts say.

The company will announce its results on August 7, could see pressure on key performance metrics including same-store sales growth (SSG) and studded jewellery sales. Brokerages expect low single-digit revenue growth and continued margin pressure during the quarter, weighed down by muted buyer sentiment and a softer studded jewellery mix.

In its quarterly update, Titan said its domestic jewellery business grew 18% YoY, while buyer growth remained flat for both Tanishq and Caratlane. The watches division reported 23% YoY growth, led by strong volume and value performance in analog watches. The EyeCare business rose 12% YoY, supported by e-commerce and retail expansion. International operations also showed momentum, with the global business growing 49% YoY, driven by a doubling of Tanishq’s presence in the US.

However, analysts remain cautious on the quarter. According to Emkay, despite Titan’s retail network expansion, buyer growth was flat, likely impacted by elevated gold prices, increased competition from existing players, and the entry of new brands like Indriya in certain markets. The high-margin studded segment, which typically benefits from a rising gold price environment, remained under pressure, registering low double-digit growth. Analysts noted that low footfalls further dragged performance, and that expectations of a recovery must now be tempered given the high base of Q2/Q3FY25, which had seen a spike due to customs duty cuts.

On the profitability front, Motilal Oswal notes that EBITDA margins remain under pressure, similar to FY24 levels, due to a muted studded jewellery mix. The brokerage emphasised that it will be critical to track margin trends going forward, especially amid intensifying competition.

While Titan’s non-jewellery businesses, watches, eyewear, and international, are scaling up well and now contribute 12% of revenue and 10% of EBIT, the jewellery segment continues to account for the bulk of earnings.

While the company has continued investing heavily in supply chains, omnichannel infrastructure, digital capabilities, and international markets. However, these investments, coupled with a volatile gold price environment, have exerted pressure on margins, says Motilal Oswal in its outlook on Titan’s annual report. According to InCred Equities, the jewellery business margin (standalone, ex-bullion) contracted by 90 basis points to 11.4% in FY25 and declined by 230 basis points from FY23. The company also increased spending on consumer promotions to support demand and acquire new customers.

Source: https://www.thehindubusinessline.com/