Titan eyes up to 20% growth in jewellery business in fiscal 2026, gold rally threatens margin

Titan Ltd forecast revenue growth of up to 20% for its mainstay jewellery business in the next financial year, driven by demand from affluent Indians, but flagged risks to margins from rallying gold prices.

Higher gold prices have not deterred affluent Indians from splurging on ornaments for weddings and accumulating gold as a form of investment, even as the middle class has reined in spending on discretionary items.

Titan’s jewellery business, accounting for nearly 90% of its total revenue, would grow in the mid-teen percentage range to 20% in the year beginning April 1, the group’s Chief Financial Officer Ashok Sonthalia told Reuters on Monday.

The segment posted a 20.2% growth last year and 20.4% in the nine months ended December 31.

Titan gets a bulk of its revenue from affluent Indians, whose purchasing power and inclination to indulge is largely unaffected by inflation and higher interest rates, Sonthalia said.

However, a rally in benchmark gold prices is posing a threat to Titan’s plans to achieve its core earnings margin forecast of between 11% and 11.5%.

“If gold prices keep going up like this (and) it doesn’t normalize … 11%-11.5% may be difficult,” Sonthalia said.

Spot gold rose about 27% in 2024 and looks set for a record-breaking 2025 as heightened economic uncertainty and inflation concern under U.S. President Donald Trump‘s second term boost demand.

Titan had said earlier that surging prices of gold were prompting more customers to buy coins – which are less profitable for Titan – as a form of investment.

In the quarter ended December 31, core earnings margin in its jewellery business shrank 100 basis points to 11.2%.
For the broader group, Sonthalia forecast current-quarter revenue growth in the double-digit percentage range.