Titan Q3 results miss Street estimates; should you buy, sell or hold the Tata group stock?

Titan share price NSE, Titan share price target: Titan shares registered mild gains on Friday, snapping three back-to-back sessions of losses, after the Tata group company reported a quarterly net profit that fell short of analysts’ estimates. The Titan stock gained by as much as Rs 86, or 2.4 per cent, to Rs 3,713.5 apiece in early deals on NSE. Titan settled at Rs 3,615, down by Rs 12.45 or 0.34 per cent on NSE.

During the last 30 minutes of trade on February 1, the Bengaluru-headquartered consumer lifestyle firm, which manufacturers a range of products such as jewellery and watches, reported a 9.4 per cent year-on-year increase in standalone net profit to Rs 1,040 crore for the quarter ended December 31, 2023, driven by sales in the festive season.

Its total income grew 22.7 per cent to Rs 13,071 crore for the fiscal third quarter, according to a regulatory filing.

According to Zee Business analysts, the Tata group firm was estimated to report a standalone net profit of Rs 1,157 crore and revenue of Rs 13,268 crore for the December quarter.

"The Indian business grew 21 per cent in the same period. The festive season saw a healthy double-digit buyer growth… The business continued to run its attractive programmes that helped maintain growth momentum amid an environment of high gold prices," the company said.

Tanishq expanded its international presence by adding two more stores in the US in Houston and Dallas and one store in Singapore, it said.

Mia opened its first store in Dubai, taking the company's jewellery international footprint to 14 stores. Read more

Titan shares: What do brokerages suggest?

CLSA maintained a ‘buy’ call on Titan after the company’s earnings announcement and reduced its target for the stock to Rs 4,354 from Rs 4,494. "Overall EBITDA margin, at 11.2 per cent, 117bps below estimates primarily due to significant EBIT margin contractions in the watch & eyecare segments," according to the brokerage.

Morgan Stanley maintained an ‘equal-weight’ rating on the counter and raised its target to Rs 3,290 from Rs 3,190. The Tata group firm missed the brokerage’s earnings estimates with weak margins. Continued momentum in jewellery was positive while eyecare growth was weak, and the management remains optimistic, according to Morgan Stanley. 

Goldman Sachs retained a ‘buy’ call on Titan but reduced its target for the stock to Rs 4,075 from Rs 4,125. Jefferies kept its ‘hold’ call on Titan citing rich valuations and reduced its target for the stock to Rs 3,600 from Rs 3,650.

According to Jefferies, Titan’s quarterly margin missed estimates but its 20 per cent growth appeared strong in the current context.

With inputs from PTI

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