Shares of Titan Co. Ltd fell by 6% on Tuesday after the jewellery major reported a tepid business update for the June-ended quarter (Q1FY26), raising fresh concerns about growth amid high gold prices and soft consumer sentiment.
Titan’s domestic jewellery business grew 18% year-on-year in Q1, with its key brands—Tanishq, Mia and Zoya (TMZ)—posting 17% growth. “This is lower versus our initial estimates of about 22% jewellery growth,” said JM Financial Institutional Securities.
The performance was modest, especially considering a more than 30% rise in gold prices during the quarter and a favourable base—the same quarter last year saw only 9% growth due to election-related restrictions in many markets, fewer wedding dates, and a sharp run-up in gold prices (up about 20% year-on-year).
Titan said while Akshaya Tritiya demand remained robust, the rally in gold prices between May and mid-June curbed purchases. Like-to-like growth in TMZ remained in low double digits, driven primarily by higher ticket sizes rather than volumes.
In contrast, smaller peer Kalyan Jewellers continued to outperform. Its India operations saw a 31% revenue jump in Q1FY26, driven by Akshaya Tritiya and wedding demand. Same store sales growth (SSSG) stood at 18%, as per the company’s update. Like-to-like or SSSG measures comparable sales growth over a period.
ICICI Securities has reiterated its view: that Kalyan will maintain its growth premium over Titan in FY26, with modelled standalone jewellery revenue compound annual growth rate of around 30% for Kalyan, compared to 19% for Titan over FY25–27. Key risks for Kalyan include a delay in showroom expansion and potentially higher competitive intensity in its core south India markets, according to the broking firm.
While Titan’s Q1 of FY25 had a weak base, growth was much stronger in the remaining quarters of the year at about 25%, which means growth outlook is challenging ahead. “While there have been periods of strong rebound in the past, expectations of a recovery now need to be weighed against a strong base, which had a big customs duty-cut related pick-up in Q2/Q3FY25,” said an Emkay Global Financial Services report on 7 July.
Nevertheless, valuations of both stocks don’t offer comfort.
Based on Bloomberg data, Titan trades at 65 times estimated FY26 earnings, while Kalyan trades at 52 times. Note that Kalyan’s shares have sharply lagged those of Titan so far in 2025, falling 25% compared to the 6% drop in the latter. A large part of the drop in Kalyan’s shares, earlier this year, came amid multiple concerns, including audit disclosures, alleged tax raids, and promoter-level share pledges. The stock has rebounded nearly 44% from its 52-week low of ₹399.40 seen in March.
Given the risk to estimates, the increasing competition, mushrooming lab grown diamond players and deteriorating RoIC (return on invested capital) profile, Emkay maintains a reduce rating on Titan stock with a target price of ₹3,350. Titan shares now trade at ₹3,441 apiece.
True, elevated gold prices have still not had a big negative impact on demand. Still, a sharp correction or higher volatility in gold prices is a key near-term risk for jewellery companies as customers may shy away from purchases. How consumer behaviour evolves is crucial.
For instance, Titan’s update said consumers preferred light weight and lower karatage jewellery given the high gold rates. When Q1FY26 results are announced, margins will be in focus. Relatively slower growth in the studded jewellery segment may hurt Titan’s margin. JM Financial expects Titan’s standalone jewellery Ebit margin at 11% (ex-bullion sales; about 20 basis points down year-on-year).
