Titan Company Limited Q3 FY26 Earnings Call Summary

Summary

Titan Company Limited - Q3 FY26 Earnings Call Summary Wednesday, February 11, 2026

Event Participants

Executives 7 Ajoy Chawla (MD), Arun Narayan (CEO, Jewellery), Ashok Sonthalia (CFO), Kuruvilla Markose (CEO, Watches & Wearables), Manish Gupta (CEO, Fragrances & Fashion Accessories), N. S. Raghavan (CEO, Eyecare), Saumen Bhaumik (MD, CaratLane)

Analysts 10 Amit Sachdeva (UBS), Arnab Mitra (Goldman Sachs), Devanshu Bansal (Emkay Global), Harit Kapoor (Investec), Jaykumar Doshi (Kotak), Jignanshu Gor (Bernstein), Manoj Menon (ICICI Securities), Mihir Shah (Nomura), Siddhant Dand (Goodwill), Videesha Sheth (Ambit Capital)

Financials & KPIs

Geographic & Segment Commentary

• Jewellery: Delivered robust 40% growth despite gold price volatility; focus remains on lightweight 18-carat and 14-carat traditional jewellery to maintain accessibility. Asset quality is supported by a 50% contribution from exchange programs (old gold). Strategic focus is on “irrational desire” through high-value collections and exhibitions.
• CaratLane: Achieved a significant margin uptick moving toward low double-digit EBIT margins. Growth was driven by 85-90% studded ratio and disciplined cost management over the last six quarters. The segment is successfully targeting younger demographics through 9-carat and 14-carat modern diamond jewellery.
• International Business: Completed the acquisition of a 67% stake in Damas; full consolidation begins Q4 FY26. Current margins sit at 5-6% (excluding one-offs), with a focus on converting select Damas stores in specific catchments to the Tanishq brand.
• Eyecare: Domestic growth stood at 17.5% with an 8-9% volume uptick. Premiumization is being driven by collaboration with 15-20 international brands, which saw high traction during the NRI festive season in November and December.

Company-Specific & Strategic Commentary

• Damas Acquisition: Completed 67% stake; financial consolidation effective January 1, 2026, making consolidated views critical for future analysis.
• Gold Exchange Strategy: Pivoted the narrative to “emotional connect” and national gold conservation to drive the exchange program, which now impacts over 50% of the business.
• Product Innovation: Launched 18-carat traditional and 9-carat diamond jewellery (CaratLane/Mia) to counter inflation and keep price points accessible below ₹1 lakh.
• Operational Agility: Maintained supply chain stability by providing gold to vendor partners, insulating manufacturing from price volatility and lead-time issues.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Jewellery Margin Strategy

• Question: How are you managing margins given the 200 bps dip in standalone gross margins? (Devanshu Bansal)
• Answer: Excluding bullion, the normalized drop is 1%. Rising gold prices shift the mix toward coins and reduce the percentage margin of studded jewellery. Management is focused on absolute EBIT growth and operating leverage (Ashok Sonthalia).

Consumer Behavior & Ticket Size

• Question: Is the flat buyer growth a concern given the rise in ticket sizes? (Arnab Mitra)
• Answer: New buyer contribution remains healthy at 45%. Ticket sizes reached ₹1.9 lakh because gold prices rose 44%, but volume/buyer growth remains the priority through lightweighting and exchange (Arun Narayan).

International Performance

• Question: What are the margins in mature international stores? (Siddhant Dand)
• Answer: Adjusting for primary sales, margins are currently 5-6%. The long-term profile should reflect India jewellery margins as the network scales (Ashok Sonthalia).

Gold Accessibility

• Question: Are younger generations moving away from gold? (Vivek)
• Answer: Performance in Mia and CaratLane suggests high interest in modern gold products; the “investment plus adornment” narrative remains strong among youngsters (Arun Narayan, Ajoy Chawla).

Key Takeaway

Titan delivered a robust performance in Q3 FY26, headlined by a 40% growth in the jewellery division despite significant gold price volatility. The company reached a record average ticket size of ₹1.9 lakh, successfully leveraging its “Golden Advantage” grammage scheme and a rejuvenated exchange program (contributing 50% of sales) to maintain demand. Strategically, the completion of the 67% Damas acquisition and the continued scaling of CaratLane towards double-digit EBIT margins signal a shift toward a more complex, consolidated global entity. Management is pivoting its internal focus toward absolute EBIT growth rather than percentage margins, as rising gold prices continue to dilute the studded jewellery mix. While Q4 started well, the company remains cautious regarding gold price volatility and its impact on the sub-₹1 lakh consumer segment, relying on premium collections and store expansion to sustain momentum.