Titan Share Price Target Cut by Emkay On Damas Deal Concerns; 'Reduce' Rating Maintained - Here's Why

Titan Company’s ambitious global push through its acquisition of Dubai-based Damas Jewellery has received a cautious reaction from Emkay Global Financial Services. The brokerage has reiterated its ‘Reduce’ rating on Titan, highlighting that the acquisition may offer insignificant value creation relative to the company’s size and may consume disproportionate managerial attention.

Damas Acquisition: Not Cheap, Limited Upside
In a detailed report, Emkay stated: “We maintain REDUCE on TTAN, as the Damas acquisition is not cheap and potential value creation is insignificant (vs TTAN’s scale).”

Titan is acquiring a 67% stake in Damas, a premium jewellery brand with a chequered past in the Middle East, for which it plans to raise Rs 1,200 crore in debt at a 6% interest cost. However, Emkay believes the core Signature segment of Damas—constituting about 40% of its topline—accounts for the only meaningful recurring business.

The report noted that excluding the Graff business (20%, which is to be shelved pre-acquisition) and valuing the remaining gold business (40%) at just its inventory value, Titan appears to be paying approximately 20x trailing EBITDA for Damas Signature. While this is a fair valuation, Emkay says the real upside to Titan’s market capitalization is marginal—even in bullish scenarios.

Damas Signature: Better Margins but High Expectations
Titan’s rationale behind the deal lies in Damas Signature’s relatively better margins, thanks to a 50% studded jewellery mix and higher making charges compared to the Indian market. Titan also sees potential in expanding the brand in the underpenetrated KSA (Saudi Arabia) market.

TTAN plans to apply its “India playbook” by improving merchandising, sourcing, and replenishment strategies. It also intends to leverage its existing manufacturing and supplier ecosystem in Hosur and Pantnagar to enhance Damas operations.

Moreover, Emkay highlights that Titan has confidence in Damas’s potential: “TTAN projected confidence, though, as it stated it would explore more International acquisitions only after seeing a turnaround in Damas.”

Operational Complexity: Bandwidth vs Benefits
Despite Titan’s optimism, Emkay flags a major concern—incommensurate bandwidth.

“We believe the acquisition may occupy incommensurate bandwidth, as the business is in need of improving its retail KPIs in UAE (sourcing/merchandising), its network expansion in a less-penetrated KSA market, and a major overhaul of its Gold business.”

Damas currently operates around 146 stores, of which approximately 40 are under its low-profit Gold segment. These outlets contribute nearly 50% of revenue despite accounting for just 30% of the store count. Titan plans to either convert some of these to its flagship Tanishq format or shut them down entirely.

EPS Accretive—But Only From FY29
Titan estimates the deal will become EPS accretive only by FY29, a timeline that Emkay finds long given the operational overhauls needed. The brokerage models a 15% CAGR for Damas Signature from CY24–CY27, compared to its historical 12–13% CAGR, alongside a near-doubling of EBITDA margins by CY27.

Still, even in this base case, Emkay estimates an incremental value addition of less than 1% to Titan’s market cap—just 0.3% in the bear case and 1.8% in the bull case.
 

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While Titan’s global aspirations are clear, Emkay remains cautious about the Damas acquisition. With a fair valuation but limited immediate upside, significant execution risks, and stretched managerial bandwidth, the brokerage advises investors to temper their expectations.

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