April 8 (Reuters) – Shares of Indian jeweller Titan Company rose as much as 5% on Tuesday to be the second-biggest gainer on the benchmark Nifty 50 index, as demand for costlier jewellery and gold coins boosted its quarterly revenue by one-fourth.
Titan was last up 3.4% at 3,126 rupees in Mumbai as of 11:20 am IST while the Nifty 50 index gained 1%.
In the January-to-March period, Titan’s stock underperformed compared with the broader market, which analysts attributed to concerns that a record rally in gold prices would affect demand in its mainstay jewellery business that includes plain and studded ornaments and gold coins.
However, high prices did not deter affluent Indians from splurging on ornaments for weddings and accumulating gold as a form of investment.
Titan’s fourth-quarter standalone revenue growth is about one percentage point higher compared to growth in the third quarter and about eight percentage points higher than the growth a year earlier.
The revenue rise was led by “high double-digit growth” in higher price bands in the jewellery segment, the company said.
The jewellery business growth topped expectations of analysts at J.P. Morgan and Axis Capital, with the latter upgrading the stock to “add” from “reduce” on discounted valuations.
Analysts have a “buy” rating on Titan on average, according to data compiled by LSEG, compared to a “strong buy” on peer Kalyan Jewellers India.
Titan’s margins have been under pressure in recent quarters due to higher sales of relatively lower-margin gold coins, implying stronger demand for gold as an investment.
Axis Capital expects the company’s margin and business mix in jewellery to normalise over the next few quarters, improving profit per share growth over fiscal years 2025 to 2027.
