Titan Co. Ltd’s latest numbers reflect the shimmer that the steep rise in gold prices brings in. Its domestic jewellery (Tanishq, Mia, and Zoya) revenue, excluding bullion sales, increased a whopping 40% year-on-year to ₹ 19,921 crore for the three months ended December (Q3FY26)—a multi-quarter high growth. The average gold price for the quarter is up about 65% from a year ago.
The sharp growth has increased the segment’s dominance for Titan in Q3, with jewellery forming around 90% of the company’s total revenue. Plain gold revenue increased 37% on-year on the back of wedding purchases and gold coins, while studded products rose 26% led by high-value segment purchases in Tanishq, store expansions in Mia and growth in solitaires.
Titan’s overall average ticket size in Q3 stood at ₹190,000, according to the management. The ticket-size growth diverged, with the parameter rising faster for plain gold jewellery versus studded jewellery.
A sore spot is that consumer sentiment at entry-level price points was adversely affected, leading to overall buyer growth remaining flat. Titan has been facing pressure in jewellery pieces priced below ₹1 lakh. A key strategy of the company to make jewellery accessible has been its pivot to lightweight products across the board, including introducing 18 karat traditional gold jewellery in certain parts of the country where it has seen a greater openness.
“We are seeing parts of North and East being more open,” said the management in the Q3 earnings call.
Tough market
In a higher-gold-price environment, getting a grip on profit margins is not easy. So, the management believes absolute Ebit (earnings before interest and tax) growth is becoming more important than margin. Titan fared well on profitability in Q3. Domestic jewellery Ebit increased as much as 59% on-year to ₹2,166 crore, with margin rising 129 basis points (bps) to 10.9%. Adjusting for the ₹253 crore impact of gold customs duty reduction in Q3FY25, normalized Ebit is up 34%, according to the company, with margin contracting about 50bps. A basis point is one hundredth of one percentage point.
Profitability was hurt owing to margin dilution in studded jewellery due to elevated gold prices, a skewed product mix owing to higher coin sales, and investments in marketing and campaigns.
ICICI Securities’ analysts believe margin sustainability within the normative range of 11-11.5% may be a key monitorable as high gold prices led margin dilution in the studded segment, and higher coin salience could continue to weigh on jewellery margins. Titan would need to consistently clock strong revenue growth to offer a cushion to the margin. For now, management’s commentary that January trends were similar to Q3FY26 should bring comfort to investors.
The stock is up about 30% in the past one year, touching a 52-week high of ₹4,378.40 apiece on Wednesday. Valuations are pricey with the shares trading at 63 times FY27 estimated earnings, based on Bloomberg consensus.
Jefferies India has raised its earnings per share estimates for FY26-28e mainly due to higher gold price assumptions. The broking firm has retained its ‘Hold’ rating on the stock with a higher price target of ₹4,700.
The moot question now is whether higher gold prices would eventually result in lasting changes in consumer behaviour. In the near term, increased volatility in gold prices may dissuade consumers from making purchases—a trend to watch.
