Titan Company’s first-quarter FY27 performance showed broad-based growth across its jewellery, watches, and eyewear divisions, despite challenging gold price volatility and increased customs duty, with margins remaining resilient and long-term growth outlook positive.
Titan Company said its first-quarter fiscal 2027 performance was supported by broad-based growth across its jewellery, watches and eyewear businesses, even as higher customs duty and volatile gold prices created a messy operating backdrop. The company reported that its jewellery division maintained a normalised EBIT margin of 10.9%, close to its long-stated benchmark of around 11%, while buyer growth improved again after a brief slowdown in May.
Management said the quarter included a one-time gain of ₹407 crore from the increase in import duty on gold from 6% to 15%, with most of the benefit sitting in inventory and expected to flow through as stock is sold over coming quarters. That was partly offset by an inventory mark-to-market loss of 75 to 80 basis points in the jewellery business, after a sharp divergence between international and domestic gold prices during advance buying. CFO Ashok Sonthalia said the company is not changing its margin guidance and still sees 11% as the centre of gravity for the segment.
The company said demand softened for roughly three weeks in May after the Prime Minister’s May 10 intervention, the duty change on May 13 and the start of Adhik Maas on May 17, but recovered in June as wedding buying returned. Titan said the lost demand was fully made up the following month and did not spill into the next quarter. The group also said its “cash for gold” exchange programme is now live across all stores and is being used as a customer-acquisition tool rather than a margin-dilutive sales push.
Competitive pressure in the jewellery market remains intense, according to management, with no real easing in discounting. Titan said its studded jewellery line continues to gain traction and should help support mix-led margin improvement later in the year, alongside other gross-margin initiatives and a lower share of low-margin gold coins. The company also reiterated confidence in long-term double-digit growth, pointing to India’s market opportunity and Titan’s relatively small share of a formalising jewellery sector.
Outside the core jewellery business, watches delivered a slightly softer profitability profile because last year included a larger one-off inventory revaluation benefit. Titan also said CaratLane remains on a path towards double-digit margins and that Teal, its project-led business, will likely remain uneven quarter to quarter. Still, the company’s latest revenue update showed 41% year-on-year growth in the quarter, reinforcing investor optimism even as brokers warned that the benefits of stronger gold buying may be harder to repeat if prices stay volatile.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
