Titan Company Ltd Q2 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Manoj Menon - ICICI Securities - Analyst : And first of all, thanks for hosting the call earlier in the day. So just I have only one feedback what you're seeing on the ground, what the customers are telling you in the context of the parabolic rise in gold prices on three aspects. One, what the customers, let's say, the willingness. You mentioned last time about buying an 18-carat or less than 22. And importantly, what the activities which you are undertaking directionally, let's say, what proportion of your inventory is non-22 in plain gold or anything like that. And then how sustainable it is. Point number two, historically, we have noted that, at least, I've observed that whenever gold prices increases beyond a point, it becomes relatively easier across the counter to upgrade the consumer to stud it because consumer probably believes that studded is far better aspirational rather than gold. So are you -- so when I look at the studded mix, it largely remains flat, 1% here and there. And -- but having said that, I can't see the flow-through into the GP also. So how do I read that? So yes, so that's one. And the third is yesterday Thangamayil had put out an exchange release saying that they have actually seen a very good October in volume. So how do -- I mean how are we to interpret? Is it an industry trend? Let's say, the typical volume price elasticity, is that holding out? How do we read that? Not Thangamayil, I'm talking about industry and particularly you.

Question: Manoj Menon - ICICI Securities - Analyst : Just one follow-up quickly, and I'll come back in the queue. So one hypothesis or assertion which I made was based on historical observation that across the counter, it's relatively easier to convert a gold consumer or a customer into a studded where for the like-to-like revenue your GP pool is far better, right? I mean so is that assertion right? I mean, or is there something like let's say you need better incentivization or some activity from your side to ensure that your conversions are, let's say, appropriately captured?

Question: Manoj Menon - ICICI Securities - Analyst : All the best to both Venkat and you in the future endeavors.

Question: Manoj Menon - ICICI Securities - Analyst : So, Ajoy, just one last thing. Is it fair to then conclude that the consumer or the customer seems to have a accepted, which is what you alluded to, higher gold prices, at least in the large-ticket consumer and that the volume pull back or cut back or elasticity is not as per historical standards, and they are willing to actually, let's say, redirect, let's say, spends from other categories or other aspects into jewelry? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 04, 2025 / 2:30AM, TITN.NS - Q2 2026 Titan Company Ltd Earnings Call

Question: Avi Mehta - Macquarie Group Ltd - Analyst : Am I audible?

Question: Avi Mehta - Macquarie Group Ltd - Analyst : Just wanted to look beyond the near term a little bit. While current gold prices are where they are, as this trajectory starts to become a little more benign, would love to hear your thoughts on how do you see growth and margin behaving and whether the historical levels that we have seen in jewelry, are they even achievable because maybe the competitive intensity has changed? So would love your thoughts on how do you see both growth at the sales front and margin behaving once all this whole elevated level goes off. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 04, 2025 / 2:30AM, TITN.NS - Q2 2026 Titan Company Ltd Earnings Call

Question: Avi Mehta - Macquarie Group Ltd - Analyst : Very clear, Ajoy. And I just had two bookkeeping questions. One, if you could just give us a sense on how should we look at watch margins now that they've done two quarters of relatively healthy performance? And second is, if I remember, 1Q had some benefit of 50 basis points in the jewelry margin, which was one-off because of inventory rebalance that should have reversed. So has that happened? And hence,

Question: Devanshu Bansal - Emkay Global Financial Services Ltd - Analyst : Congratulations on strong execution despite a high base. Sir, I wanted to check, there has been an increase of INR9,500 crore in consolidated inventory, which is a significant number. So how should we see this? Is this purely basis the rising gold price on existing inventory? Or there is a component of higher stocking in anticipation of a strong festive plus new store additions as well in this?

Question: Devanshu Bansal - Emkay Global Financial Services Ltd - Analyst : Understood. So my intent of asking this question was to sort of estimate the interest paid on GML, right? So now that festive is over, so have we seen some deduction in our inventory levels, which should sort of reduce the interest component? Or the Q2 run rate is a good run rate to sort of bake in?

Question: Devanshu Bansal - Emkay Global Financial Services Ltd - Analyst : Understood. Second question, sir, there is a big listing expected to happen in the eyewear space. For them vertical integration and their virtual solution with regards to optometrists are emerging as the key differentiator. So what is our outlook for this space as we have been growing slower, even less than the industry growth of about 13%, 14%. So I just wanted to take your views here.

Question: Devanshu Bansal - Emkay Global Financial Services Ltd - Analyst : One just small follow-up here to better understand the model. So from a back-end perspective, what all processes in terms of, say, manufacturing of frames, manufacturing of lenses, fitting of lenses, putting power into the lenses, so what all -- which all processes are we sort of doing it internally as of now? And maybe any thoughts if we want to backward integrate our supply chain? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 04, 2025 / 2:30AM, TITN.NS - Q2 2026 Titan Company Ltd Earnings Call

Question: Devanshu Bansal - Emkay Global Financial Services Ltd - Analyst : Sure, sir. Just one small question. So you've indicated from a press release perspective that there has been a strong start to the festive. So in recent periods, we have seen that there is some moderation in discretionary categories after a big sort of pickup towards occasions. So I wanted to check if you can throw some light on your growth expectations for the upcoming wedding season as well, that would be helpful. This is for jewelry space.

Question: Aditya Soman - CLSA Ltd - Analyst : And firstly, Venkat, thanks for your insights, we will miss them, and I look forward for many more. Best wishes for the rest of the team. So my questions, first on jewelry. I mean, just given the unprecedented gold prices, can you throw a little more light on how trends differ regionally within India? And obviously, given your increasing global scale also in other markets, are we seeing sort of clear differentiation in trends? That would be sort of an interesting insight. And second, on the watch business, you've made a sort of concerted effort on the analog watches side. We've seen new launches over the past six months as well. From here, should we continue expecting a sort of a significant growth in the analog space? And any sort of insights from the festive season on growth in that category?

Question: Kunal Vora - BNP Paribas Securities (Asia) Ltd - Analyst : On the competition in jewelry, are you seeing any difference in behavior from jewelers who might be owning own inventory versus those who are like using gold on lease because some of them might be sitting on large inventory gains and might be willing to operate at lower margins and can be more aggressive? That's my question number one. And second one is, can you update us on the consumer response to LGDs? With income pressures, is that something which consumer is looking at more closely? And how large is the solitaire and high-value studded jewelry business for you? And are the trends there like at par with what you're seeing in overall studded?

Question: Kunal Vora - BNP Paribas Securities (Asia) Ltd - Analyst : Okay. That's very clear. Just one follow-up, sir. Like there seems to be multiple headwinds on margins right now. Are you comfortable with the 11% floor? Or is there some risk there?

Question: Arnab Mitra - Goldman Sachs Group Inc - Analyst : I had a couple of questions. First was actually on CaratLane where your margins have expanded 250 bps to 10%. I wanted to understand, do you see -- I know there's some seasonality in CaratLane margins, but on a year-on-year basis, do you think this trajectory of margin expansion is sustainable and what has driven it? That was my first question. Second is generally consolidated jewelry EBIT growth has been running much higher than the Tanishq EBIT growth, CaratLane as well as international. So should one expect that broad trend to continue? Anything on international, which was lumpy in terms of the growth which may not sustain? So just had one question on CaratLane and one on international jewelry. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 04, 2025 / 2:30AM, TITN.NS - Q2 2026 Titan Company Ltd Earnings Call

Question: Arnab Mitra - Goldman Sachs Group Inc - Analyst : Sure. Just one follow-up on CaratLane. So just from what I understood, Saumen, you're saying that gold price could be a headwind, but that's generally a headwind for the entire industry. Otherwise, whatever initiatives would have led to this margin expansion, those you think are sustainable? Or there were some higher-than-normal margin this quarter because of some other factors. That's one thing I wanted to understand.

Question: Gaurav Jogani - JM Financial Institutional Securities Pvt Ltd - Analyst : I have just one question with regards to the reversion of the hedging gain. So if I get it clearly, the 50 bps gain that you have done in the Q1, that's kind of reversed in Q2. Is that the right understanding?

Question: Nihal Mahesh Jham - HSBC Securities & Capital Markets (India) Pvt Ltd. - Analyst : Two questions. First is, Ajoy, when you mentioned high-value studded, if you could just define is it above, say, INR 5 lakh? What is the definition of that? And if you could just give the contribution of that and the solitaire portion in your studded? The second one is that we are looking at a large share of store rehashing, around 70. I'm guessing all of it is Tanishq. So can you quantify if that leads to quite a substantial increase in the store productivity? What are the reasons for it? Maybe it's an increase in the area? And if that could also be an incremental trigger over the next six months for growth to be better than what it's already at?

Question: Nihal Mahesh Jham - HSBC Securities & Capital Markets (India) Pvt Ltd. - Analyst : Yes. On the store rehashes, 70, all of them for Tanishq. What leads to the increase in productivity and can that be an incremental driver of better growth than what it's already at?

Question: Nihal Mahesh Jham - HSBC Securities & Capital Markets (India) Pvt Ltd. - Analyst : Renovation.

Question: Nihal Mahesh Jham - HSBC Securities & Capital Markets (India) Pvt Ltd. - Analyst : Yes.

Question: Sheela Rathi - Morgan Stanley - Analyst : My first question was, Ajoy, you gave a good flavor on how the demand trends have been like-for-like festive and also the ongoing wedding calendar. I just want to get some clarification because last year in Q3 and Q4, we saw a surge in gold coin and bar demand. Just want to hear from you how that trend has been this time around.

Question: Sheela Rathi - Morgan Stanley - Analyst : Just a follow-up here. Is it aligned versus your expectation? Or is it just trending in a similar pattern, similar to what we have been seeing in the last 12 months?

Question: Sheela Rathi - Morgan Stanley - Analyst : Right. The second question is, to one of the participant question, you said that the competitive intensity remains given how the gold prices are there, particularly from the independent jewelers. Just want to hear from you is that the exchange program has become more of a -- all around your reality, maybe the intensity varies through the year, but that's our way to offset the kind of competition we see from the independent jewelers. So just one side question to that is also how are the trends for the L3 stores for us because they would be competing much harder with the independent jewelers also. So how are they kind of playing this game? And do they hedge their inventory? Yes, three questions to that. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 04, 2025 / 2:30AM, TITN.NS - Q2 2026 Titan Company Ltd Earnings Call

Question: Jaykumar Doshi - Kotak Securities Ltd - Analyst : My question is on jewelry EBIT growth. Now you started the year with a certain expectation of jewelry sales growth. And given rising gold prices, you're likely to be much ahead of that expectation. How should we think about EBIT growth from the same context? At the beginning of the year, you were expecting EBIT growth to be at least in line with revenue growth in jewelry, if not better. So do you still think that thesis plays out? On a percentage margin basis, things could be a little different. But should you be delivering better EBIT growth than what you are expecting at the beginning of the year? And second is, will this year be a year where consolidated jewelry EBIT growth will be ahead of standalone jewelry EBIT growth? That's it from my side.

Question: Jaykumar Doshi - Kotak Securities Ltd - Analyst : That is understandable, but it will still be better than what you were expecting before this maybe three, four months back, right? So look, just to put some numbers, if you're expecting 15%, 17% jewelry growth or 15% to 20% of your guidance for the year, now with the rising gold prices, if you end up at 20% to 25% jewelry top line growth, will your EBIT growth also be at least slightly better than what you were expecting at the beginning of the year? Percentage margins could be lower, that is understandable, but that is -- that's the primary sort of.

Question: Jaykumar Doshi - Kotak Securities Ltd - Analyst : You've already called out, right, nine months will be better than first half. So that's kind of directionally for you.