Titan shares slide 5% after Q2 update; festive shift, high gold prices weigh on jewellery growth

Titan Company shares fell up to 4.7% to ₹4,335.60 apiece on the NSE in early trade on Wednesday, October 7, after the company’s Q2 FY27 business update showed domestic jewellery growth of around 21% year-on-year, below several analysts’ expectations.

Analysts attributed the softer performance largely to the shift in festive demand into the December quarter, high gold prices and a decline in investment-led gold coin sales, rather than a broad-based weakening in underlying jewellery demand.

Analysts also highlighted the strong growth in studded jewellery, CaratLane, watches and eyecare, while remaining largely positive on the stock.

CITI

CITI noted that domestic jewellery growth, excluding bullion, came in at around 20%, below its estimate of 27%. However, the investment firm attributed the miss primarily to the festive season shifting into Q3 FY27 and weaker investment-led gold coin demand, which declined in the high single digits from a high base.

Excluding coins, CITI estimates underlying jewellery growth at 24-25%, suggesting that demand remained resilient. Buyer growth stayed positive in the mid-single digits, while average ticket size grew in double digits.

Studded jewellery growth was in the early 30s, significantly ahead of the roughly 20% growth in plain gold jewellery. CITI estimates this could translate into a 250-300 basis point improvement in the studded jewellery mix, which should support margins.

Citi also highlighted Titan’s store expansion, with Tanishq, Mia, Zoya and beYond adding 29 stores, while CaratLane added 32. Watches & Wearables, EyeCare and Emerging Businesses grew 30%, 28% and 21%, respectively, driving 25% growth in the consolidated consumer business excluding bullion. Citi believes the festive shift could lead to a reacceleration in Q3FY27 and sees the recent correction in the stock as an attractive entry opportunity.

CLSA

CLSA said Titan’s domestic jewellery division grew 21% in Q2FY27, ahead of its 19.3% consensus estimate. Tanishq, Mia and Zoya grew 20%, while CaratLane delivered a stronger 32% growth.

Buyer growth was in the mid-single digits, while average ticket size increased in double digits. Studded jewellery grew in the low 30s, compared with around 20% growth in plain jewellery. CLSA noted that consumer demand remained healthy for most of the quarter, with some moderation towards the end as the festive season shifted into the next quarter.

HSBC

HSBC said Titan’s Q2 sales were below expectations, partly because of the shift in festive timing, although the exact impact has not yet been disclosed.

The investment firm noted that buyer growth was slightly muted, but expects the product mix to improve, supported by lower gold coin sales and a higher contribution from studded jewellery. HSBC has trimmed its jewellery revenue estimate by 1%.

Morgan Stanley

Morgan Stanley flagged weaker-than-expected India jewellery growth in Q2, but highlighted positives including a better product mix and continued momentum in buyer growth.

The investment firm said investors will need greater clarity on the impact of the festive shift on Q2 numbers. It maintained its Overweight stance and said any near-term correction in the stock could provide an opportunity to enter.

JPMorgan

JPMorgan said Q2 FY27 revenue was below expectations, with domestic jewellery growth moderating to 21% from its estimate of 25%.

The moderation was attributed to softer buyer growth, a high single-digit decline in gold coin sales from a high base, some consumption being deferred to Q3 because of the festive shift, and a lower year-on-year increase in gold prices compared with Q1.

However, JPMorgan noted that studded jewellery continued to deliver strong early-30s growth, while demand remained healthy through most of the quarter. The investment firm estimates that July and August saw growth of more than 25%, with softness emerging in September because of the festive calendar shift.

JPMorgan expects the stock reaction to be negative following the Q2 revenue miss.

Nomura

Nomura said Titan’s consumer business grew 25% in Q2FY27, broadly in line with its expectations, while jewellery sales grew 21%, below estimates.

The investment firm attributed the jewellery growth moderation to high gold prices, a high base, Shradh and the shift in festive demand into Q3. CaratLane grew 32%, while Tanishq, Mia and Zoya grew 20%. Studded jewellery growth in the early 30s was a key positive, supporting product mix and margins.

Nomura also highlighted Titan’s store additions, with 29 new Tanishq, Mia and Zoya stores and 13 CaratLane stores, above its expectations. Watches and EyeCare grew 30% and 28%, respectively, both ahead of estimates. International sales rose 97%, led by North America, while Damas showed early signs of recovery.

What investors need to watch

The key debate for Titan now is whether the Q2 jewellery growth miss is a temporary timing issue or an indication of slower underlying demand.

Most analysts lean towards the former, pointing to healthy July-August demand, positive buyer growth and strong studded jewellery performance. The festive season shifting into Q3 could therefore make the December quarter particularly important for assessing whether growth reaccelerates.

At the same time, high gold prices remain a key variable, as they can affect buyer growth and encourage consumers to defer purchases. The stronger growth in studded jewellery is a positive for Titan because a higher contribution from this segment can improve the overall product mix and support margins.

The sharp growth in watches, EyeCare, and international operations also provides some diversification beyond the core jewellery business.