Shares of Tata group's jewelry-to-watch company- Titan in Wednesday's session (November 6)fell as much as 3.69 per cent to the day's low price of Rs 3,113.65 per share after the company's weaker-than-expected Q2 show. And in light of it, most global brokerages have slashed the stock's target price. 

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The stock is now just 2 per cent away from its 52-week low price of Rs 3,059 marked on June 4, 2024.

Net profit at the company for the September quarter declined 23 per cent year-on-year (YoY) to Rs704 crore in comparison to Rs 915 crore during the same period of the previous year. Zee Business research estimated the company's PAT at Rs 1,080 crore. The company's profitability fell despite an increase in revenue by 16 per cent on-year to Rs 14,534 crore, from Rs 12,529 crore in Q2FY24. Analysts estimated revenue to come in relatively lower in comparison at Rs 14,430 crore.

On the operational front, the company's EBITDA during the reporting quarter also fell 12 per cent on-year to Rs 1,236 crore as against Rs 1,411 crore in the same quarter of the previous year. The estimates were sharply higher at Rs 1,640 crore. Meanwhile, as against the forecast of EBITDA margin at 11.4 per cent, the company's margin tumbled by 2.8 per cent or 280 basis points to 8.5 per cent during Q2FY25.

Here's how global brokerage view Titan stock after Q2 performance

Goldman Sachs has continued with its buy rating and has slashed the target on the stock by a margin to Rs 3,650 from the earlier pegged target of Rs 3,750. The suggested target implies an upside of nearly 13 per cent from the previous close.

Even though the growth outlook remains robust, there has been a cut in margin guidance. As per the brokerage, the company logged strong growth in jewellery in Q2 and festive season in Q3 has also been good. The company's management noted that lab-grown diamonds are not having any material impact on their business. Jewellery margins  at the company have disappointed, with management lowering its margin guidance for FY25 by around 100bps.

Jefferies has also continued with its 'hold' call and slashed the target to Rs 3,400 from the previous Rs 3,600. The set target means an upside of just over 5 per cent from the last close. The brokerage said though the custom duty cut benefitted the company's jewelley business growth, it weighed negatively on margins. Also the brokerage mentioned that the adjusted margin also came out weak due to an inferior product mix (lower studded). 

Further, the brokerage added that the cut in the jewellery margin guidance would be viewed negatively partially due to weak demand for solitaire.

TITAN (CMP:3230)
Brokerage
Rating
New Target
Old Target
CLSA
Outperform
4221
3948
Morgan Stanley
Equal weight
3532
3570
Goldman Sachs
Buy
3650
3750
JP Morgan
Neutral
3100
3450
Jefferies
Hold
3400
3600

Anil Singhvi's view on Titan's Q2 results and stock

Zee Business Managing Editor Singhvi said the company posted weak Q2 but was better than other consumer companies. Also, the market guru maintains strong outlook for the company for the next 6 months. He further advised not to short Titan at lower levels.

Anil Singhvi recommends buying Titan Futures in today’s weakness for the next 6 months. He said the stock's support level is placed at Rs 3,130 and Rs 3,030, while he recommends the trade for targets of Rs 3,275 and Rs 3,310.