Amid stiffer competition and higher gold prices in the quarter, Titan increased investments in marketing and gold exchange programmes to spur demand. While this helped jewellery revenue, excluding bullion sales, grow 23% year-on-year, margins slid. Ebit margin fell 80 basis points y-o-y and 190 bps sequentially to 12.2%. A lower share of studded jewellery y-o-y affected the overall margin. The watches and eyewear segments had lacklustre margins in Q3.
Consequently, some brokerages trimmed earnings expectations after the results. Prabhudas Lilladher cut its FY24, FY25 and FY26 earnings-per-share estimates by 2%, 1.6%, and 1.4%, "following margin pressure across segments indicating some softness in demand and higher competition." The brokerage said it expected watch margins to improve, but that eyewear margins would remain low due to more competition.
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