Why Has Morgan Stanley Raised Target on Titan Amid Strong Jewellery Growth?
About the Brokerage Update
Global brokerage Morgan Stanley has maintained its Overweight rating on Titan while raising its target price to ₹4,529 from ₹4,062. The revision reflects improved near-term earnings visibility, stronger domestic jewellery growth expectations, and recalibrated margin assumptions.
This move is not just a target price adjustment — it signals increasing confidence in the structural strength of India’s organised jewellery retail market.
Key Estimate Revisions
🔹 FY26 Revenue raised by 12%
🔹 FY26 EBITDA raised by 5%
🔹 FY26 PAT raised by 6%
🔹 FY27–28 EPS raised by 2–3%
The brokerage attributes the hike primarily to stronger domestic jewellery demand and model roll-forward adjustments over a three-month period.
Such revisions are meaningful because upgrades at revenue level indicate demand strength, while EBITDA and PAT adjustments reflect margin sustainability and operating leverage.
Domestic Jewellery Growth Outlook
Titan’s jewellery business remains its primary earnings engine. An improved growth outlook suggests:
• Continued shift from unorganised to organised players
• Strong wedding and festive demand visibility
• Premiumisation within product mix
• Expanding store footprint and digital integration
India’s jewellery market is structurally evolving. Consumers increasingly prefer branded, certified, and transparent pricing models — areas where organised players hold a competitive advantage.
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Target Price Drivers
🔹 Higher near-term earnings
🔹 3-month model roll-forward
🔹 Bull / base / bear case values raised by 9–12%
This indicates improved valuation comfort across multiple scenarios rather than a single optimistic assumption.
| Metric | Previous | Revised |
|---|---|---|
| Target Price | ₹4,062 | ₹4,529 |
| FY26 Revenue | Base Estimate | +12% |
| FY26 EBITDA | Base Estimate | +5% |
| FY26 PAT | Base Estimate | +6% |
Margin Assumptions Tweaked
While revenue upgrades were stronger, EBITDA adjustments were comparatively moderate, indicating calibrated margin expectations. This suggests improved operating leverage but with cost discipline assumptions intact.
Jewellery margins depend on gold price volatility, inventory management, and making charges mix. Controlled expansion while maintaining profitability remains key.
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Bull / Base / Bear Framework
Raising all three scenario values by 9–12% indicates improved conviction across demand cycles. It reflects stronger structural positioning rather than short-term momentum alone.
Titan’s positioning in watches, eyewear, and emerging segments adds diversification, but jewellery continues to dominate valuation drivers.
What Investors Should Watch
• Sustained same-store sales growth
• Gold price volatility impact
• Margin trajectory amid expansion
• Store addition pace and digital integration
• Competitive intensity in organised jewellery retail
Derivative Pro & Nifty Expert Gulshan Khera, CFP® notes that brokerage upgrades typically amplify institutional interest. However, valuation discipline and risk management remain critical when momentum builds.
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Related Investor Queries
Why did Morgan Stanley raise Titan target price?
Is domestic jewellery growth accelerating?
How significant are FY26 earnings upgrades?
Does Overweight rating signal strong upside?
What are risks to jewellery margin expansion?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
