Titan shares in focus after mixed Q1; Macquarie sees up to 18% potential upside

Tata Group watch to jewellery major Titan shares will be in focus on Monday (August 5, 2024) aftet the company reported its Q1 earnings after market hours on Friday. The company's total income for the reporting quarter logged 11.3 per cent on-year growth and was recorded at Rs 12,386 crore. Profit before tax at the company during the June quarter was down by 3 per cent to Rs 973 crore.  

The PBT was lower by 3 per cent at "973 er compared to Q1FY24 due to financial costs of Caratlane acquisition (acquisition costs were not part of the base quarter), noted the company's filing.

Consolidated PAT at the company also declined 5.5 per cent on-year and was recorded at Rs 715 crore. The same in the same period last year was at Rs 715 crore.

Margins also came in lower at 9.4 per cent as against estimates of 9.7 per cent.

Here's what global brokerages make of Titan's Q1 results

Goldman Sachs maintained a buy rating on the stock with a raised target of Rs 3,750.  The company's Q1 EBITDA as per the brokerage has been marginally ahead of expectations. Jewellery margins a positive surprise
 The brokerage highlighted that pickup was seen after the cut in gold import duty. Also, a one-off impact likely from the gold import duty cut is in-line with our estimates.

Citi, meanwhile, has maintained a neutral call on the stock with the target raised to Rs 3,510 per share

JP Morgan has also maintained neutral call with the target pegged at Rs 3,450 per share. As per the brokerage, the company posted in-line Q1 results at a time when competitive landscape remains stiff. The company's jewellery segment is expected to post better growth after subdued Q1. Despite Q2 revenue growth reverting to healthy double-digit levels, JP Morgan sees uncertainty on evolution of growth/margin. 

Macquarie, meanwhile, has continued with its outperform call with a target price of Rs 4,100 per share.