Downgrades

Kalyan Jewellers (KALYANKJ)’s consolidated revenue grew 30% YoY to INR78.6b (in line). India business achieved 31% YoY revenue growth, driven by store additions (added a net of 13 Kalyan Indian stores and 15 Candere stores) and 16% SSSG (14% in the South, 17% in the non-South).

Kalyan Jewellers’ (KALYANKJ) consolidated revenue grew 31% YoY to INR72.7b (in line). The Indian business achieved 31% YoY revenue growth, driven by store additions (added net nine Kalyan Indian stores and eight
Candere stores) and 18% SSSG (20% in South, 16% in non-South).

Titan Company (TTAN) posted consolidated sales growth of 25% YoY in 1QFY26. Standalone jewelry sales (excl. bullion) rose 17% YoY, driven by an increase in ticket size (16% YoY) due to rising gold prices.

We interacted with the management of PN Gadgil (PNG) to discuss the industry outlook, growth prospects for its business, profitability outlook, and other focus areas.

TTAN saw growth moderation in Q1 with 17% growth in the jewelry business vs recent trends of ~25% growth. Also, LTL growth for TTAN in the early double digits is weaker vs 18-19% for peers.

TTAN reported a robust 4Q led by 1) value growth leg by 30-40% higher gold prices 2) 330bps margin gain in watches and 3) 20bps higher margins in jewellery enabled by operating leverage and hedging gains. 1H26 outlook remains positive given low vase due to elections and no marriage days. Higher gold prices are impacting demand however consumers are shifting to lighter jewellery and value growth remains strong. Gold on lease charges are...

TTAN reported a ~10% EBITDA miss, half of which was due to a ~100bps miss on jewelry margin, with the rest due to higher loss on customs duty cut (one-off). Topline trends for jewelry are impressive with 15%/21% LFL/UCP growth in Q2, and encouraging festive trends in Q3TD.

Titan's domestic jewellery business revenue growth had a strong revival (~25% YoY; LFL: 15% YoY) driven by improved industry demand conditions.

Titan Company (TTAN) posted consolidated sales growth of 16% YoY in 2QFY25 (in line).

Titan Company’s (Titan’s) Q2FY2025 numbers were affected by lower margins in the jewellery business. Consolidated revenues grew by 16% y-o-y; adjusted PAT stood flat y-o-y.

In FY24, TTAN posted a strong double-digit growth (26% YoY) despite various demand challenges. The company continued to invest in supply chains, digital data, omnichannel capabilities, retail networks, and international markets.

Titan's domestic jewellery business had an abnormally weak quarter (LFL and revenue growth of 3% and 8% YoY respectively) due to external headwinds of steep gold price inflation.

Titan Company’s (Titan’s) Q4FY2024 performance was affected by lower-than-expected EBIDTA margins at 9.5%, resulting in lower EBIDTA growth of 9%. Consolidated revenue grew 22% y-o-y.

We are surprised at consensus' surprise about Titan's Jewellery margin glide path. We reiterate our view - Tanishq needs to reduce price premium (on gold, on making charges) to drive growth (see reports - link 1, 2). In 1QFY24, revenue growth in Jewellery at 19% YoY (22% SSSG) was healthy but must be seen in the context of 10% YoY retail expansion and 17% YoY inflation in gold price.

Titan continues to achieve new feat, recording stellar growth in Revenue of 25% YoY (Standalone) at ? 8,553 Cr with a 3 year CAGR growth of 25.1%. The Jewellery segment witnessed a robust Total Income growth by 24% YoY at ? 7,576 Cr along with domestic operations increasing by 21% YoY on the back of strong wedding season with over all high retail sales growth.

Jewellery segment continued to outperform with 20%+ 3-year revenue CAGR in 9MFY23. SSSG at 9% is encouraging, driven by higher buyer growth (now at 49% vs 48% in Q2FY23) while growth in ticket-size has been moderate.

We believe that Tanishq has effectively fine-tuned the success template in Chennai / Tamil Nadu, which we believe is a replicable template on other southern states.