Despite reporting a robust 20% year-on-year (YoY) growth in its consumer business for the first quarter of fiscal year 2026 (Q1FY26), Titan Company witnessed a fall in its shares. The company's stock price experienced a decrease of approximately 4% [actual drop was less than 1% based on the closing price on July 7th] , reflecting investor concerns despite the positive sales figures.
Key Highlights of Q1FY26 Performance
Titan's consumer business demonstrated significant growth, driven by strong performances across various segments. The company's domestic jewellery operations grew by 18% YoY, contributing significantly to the overall consumer business growth. The watches and wearables segment also performed well, with a notable 23% YoY growth. The Eyecare division saw a 12% increase in business. The international business experienced substantial expansion, growing by approximately 49% YoY, primarily fueled by the near doubling of Tanishq's business in the US market.
In Q1FY26, Titan strategically expanded its retail network, adding a net of 10 stores, bringing the total count to 3,322 stores. Within the jewellery segment, the company added 19 new stores, with CaratLane contributing nine stores. However, the Eyecare business saw a reduction of 20 stores, as 12 new stores were opened but 32 were closed due to a revaluation of retail strategy.
Factors Affecting Consumer Sentiment
The growth in the jewellery segment occurred amidst volatility in gold prices, which impacted consumer sentiment. Consumers showed a preference for lightweight and lower-karatage jewellery in response to the high gold rates. While the Akshaya Tritiya festival boosted sales, increasing gold prices from May to mid-June dampened customer purchases. Buyer growth remained flat YoY for both Tanishq, Mia, Zoya and CaratLane. Gold coins showed strong gains, while plain gold grew in mid-teens and studded segment growth in early double digits. CaratLane's sales experienced healthy double-digit growth of 38%.
Segmental Performance
The watches and wearables business saw strong growth in the domestic market, driven by analog watches, with both volume and value increases. Titan's key watch brands, Sonata, Titan and Fastrack, all posted double-digit growth during the quarter. The Eyecare division's domestic business grew by 12% YoY, supported by strong performance in retail and e-commerce channels, as well as both international and house brands. Emerging businesses, including fragrances, women's bags and Taneira, also showed substantial growth, with fragrances increasing by 56% YoY and women's bags growing by approximately 61% YoY.
Financials
For the financial year 2025, Titan reported a 21.2% YoY increase in operating revenue, reaching ₹56,853 crore, compared to ₹46,921 crore in FY24. Total income also rose by 20.8% YoY to ₹57,339 crore. The company's EBITDA stood at ₹6,180 crore in FY25, reflecting a 6.1% YoY growth. The Board of Directors has recommended a dividend of ₹11 per ordinary share, with a record date of July 8, 2025.
Market Reaction and Future Outlook
Despite the positive growth figures, Titan's stock price experienced a slight decline. This could be attributed to several factors, including concerns about the impact of gold price volatility on future consumer demand, increased competition, or broader market trends. However, analysts remain optimistic about Titan's long-term prospects, citing the company's strong brand reputation, diverse product portfolio, and expanding retail network. The company's focus on innovation, customer-centric strategies, and expansion into new markets are expected to drive future growth.
