Titan Company Reports Healthy Q2FY26 Results with Strong Jewellery Growth and Maintained Margins

Titan Company has reported healthy financial results for the second quarter of fiscal year 2026 (Q2FY26), showcasing a strong 29 percent year-on-year revenue growth. The company's core jewellery business was the main driver of this performance, achieving a 19 percent year-on-year increase in domestic sales, bolstered by early festive season demand and an effective gold exchange program.

Despite a substantial 45-50 percent year-on-year surge in gold prices, Titan's revenue growth was predominantly fueled by higher average transaction values, as buyer growth saw a marginal decline. The studded jewellery segment performed slightly better than the plain gold jewellery segment, growing at 16 percent and 13 percent year-on-year, respectively. Coin sales also saw a significant 65 percent year-on-year jump, and the international jewellery business nearly doubled its sales.

While the jewellery segment showed strong momentum, the watches and wearables, and eyecare businesses lagged behind overall growth. Gross and EBITDA margins saw an improvement of 70 and 150 basis points year-on-year, respectively, attributed to a low base from Q2FY25, which was impacted by inventory write-downs after a customs duty cut. However, adjusted EBITDA margins experienced a minor decline of 50 basis points year-on-year due to an unfavorable sales mix and the high gold prices.

Titan expects Q3FY26 to outperform the first half of FY26, anticipating continued strong demand from the Diwali festive period and the upcoming wedding season. The company is focusing on lightweight and lower-carat jewellery (14 and 18 carats) to stimulate sales amid rising gold costs and is gaining market share through localization strategies and network expansion. Tanishq stores increased by 40 to a total of 510, with plans to renovate or expand 70-80 more stores. International markets, particularly North America and the Middle East, are showing strong traction.

The company has broadly retained its FY26 jewellery EBIT margin guidance of 11-11.5 percent, aiming to navigate headwinds from gold price volatility and competition. Titan is also scaling up its non-jewellery businesses; the watches segment is benefiting from premiumization, the eyewear business is transitioning to an omnichannel model, and emerging businesses like Taneria are growing.

Impact: This news is expected to have a positive impact on Titan Company's stock performance. Strong operational results, effective margin management under challenging price conditions, and a positive outlook for future growth, particularly from its dominant jewellery segment and expanding non-jewellery ventures, are likely to boost investor confidence and potentially influence market sentiment towards the stock. Rating: 8/10

Difficult terms: * **YoY**: Stands for "Year-on-Year," comparing a period's performance to the same period in the previous year. * **EBITDA**: Stands for "Earnings Before Interest, Taxes, Depreciation, and Amortization." It is a measure of a company's operating performance. * **Basis points (bps)**: A unit of measure used in finance to denote the percentage change in a financial instrument. One basis point is equal to 0.01% or 1/100th of a percentage point. * **EBIT**: Stands for "Earnings Before Interest and Taxes." It is a measure of a company's operating profit. * **Bullion**: Gold or silver in bulk form, typically unminted or unmanufactured. * **Digi gold**: Digital gold that can be bought, sold, and held through online platforms or apps, representing ownership of physical gold. * **Omni channel**: A retail strategy that integrates different channels of selling, like online, physical stores, and mobile apps, to create a seamless customer experience. * **P/E**: Stands for "Price-to-Earnings ratio," a valuation metric that compares a company's stock price to its earnings per share. * **CMP**: Stands for "Current Market Price," the current trading price of a stock on an exchange.