Titan beYon: Titan forays into the LGD market. Maintain REDUCE

Titan announced the launch of its brand ‘beYon,’ marking a foray into India’s growing lab-grown diamond (LGD) market, on 29 December 2025. It has opened the first store in Mumbai. ‘beYon’ is positioned as fashion-forward, everyday indulgence play targeting younger consumers seeking self-expression through accessible LGD jewelry (priced at INR 23-25k per carat vs market rate of INR 30-50k). The opportunity stems from India’s underpenetrated studded market (12-15% of Indian jewelry market), of which LGD accounts for a mere 2-4%. Management views beYon as an entry point for aspirational young consumers, who may eventually graduate to Mia/Caratlane/Tanishq. Titan plans to add 8-10 beYon stores in the medium term in Mumbai/Delhi to study consumer behavior and LGD acceptance before launching a broader rollout. We believe that an entry of India’s largest organized jewelry player in LGD will build trust in the category and accelerate its adoption. We are not yet building the format into our estimates as the format still remains an experiment with uncertain unit economics. That said, based on the Q3 business update, we have revised our FY27/28 EPS estimates upward by ~1% each, driven primarily by stronger-than-expected revenue growth. We retain REDUCE with a DCF-based TP of INR 3,800/sh (implying ~50x FY28 P/E).

About the brand: Titan announced the launch of its brand ‘beYon’, marking its foray into India’s growing lab-grown diamond (LGD) market on December 29, 2025, with its first store in Mumbai. The brand targets younger, fashion-forward consumers who seek self-expression through accessible diamond jewelry without the emotional, occasion-driven, or store-of-value aspects associated with natural diamonds like those in Tanishq, Mia, or Caratlane. Notably, there is no exchange policy on the LGD component, reinforcing brands’ positioning as fashion-forward, everyday indulgence play.

How big is the opportunity? The addressable opportunity for LGD is significant, given that India’s studded jewelry market remains underpenetrated at 12-15% of the total jewelry market, with LGDs currently comprising just 2-4% of the studded jewelry market. This creates a substantial opportunity for industry players to drive category adoption through aggressive pricing. Despite low current penetration, management emphasized that aspiration to own diamonds remains exceptionally high among Indian consumers. Management views cannibalization risks as low, citing successful portfolio precedents like Mia and Caratlane’s coexistence, differentiated positioning (beYon’s self-expressive/everyday vs. Tanishq’s emotional/precious positioning), and underpenetrated studded market. Instead, management expects through beYon’s accessible LGD pricing (priced at INR 23-25k per carat vs market rate of INR 30-50k) to serve as an entry point for aspirational young consumer, who will eventually graduate to Mia/Caratlane/Tanishq, ultimately expanding the overall diamond market pie.

Initial scaling plans: Management highlighted beYon will follow a disciplined scaling approach, prioritizing learning over rapid expansion. Titan plans to add 8-10 beYon stores in the medium term, mainly in Mumbai and Delhi. The initial store openings will serve as a pilot, allowing the company to study consumer behavior and the market’s acceptance of LGD before broader rollout.

Q3 Business Update: Consumer businesses grew by ~40% YoY, led by 41% growth in domestic jewelry (ex-bullion). Revenue growth was primarily driven by ASP increase from gold price surge. Buyer growth remained flat. Plain gold/studded jewelry grew in the late-30s/mid-20s. Tanishq, Mia, and Zoya combined added 23 stores. SSSG was in low thirties. Tanishq deployed an aggressive gold exchange offer to recruit customers in Q3. Caratlane clocked 42% growth in Q3. Watches/eyecare/emerging businesses/international sales grew by 13/16/14/79% respectively.

Outlook: Titan’s entry as India’s largest organized jeweler into LGD – builds category credibility and accelerates adoption. In the near term, financial impact is immaterial, but strategic optionality is meaningful if LGD adoption accelerates. We are not yet building the format into our estimates as the format still remains an experiment with uncertain unit economics. That said, based on the Q3 business update, we have revised our FY27/28 EPS estimates upward by ~1% each driven primarily by stronger-than-expected revenue growth. We retain REDUCE with a DCF-based TP of INR 3,800/sh (implying ~50x FY28 P/E).

Disclaimer : This content is only for informational purpose. Do not make any investment based solely on this recommendation as it is not based on your unique risk tolerance and investment objectives. Investments in stocks are subject to market risks and other risks. There is no guarantee of the return that will be given.

Source: HDFC Securities Institutional Equities

To see full report and full disclaimer, click on: https://www.hdfcsec.com/hsl.docs/Titan%20-%20Update%20-%20Jan26%20-%20HSIE-202601082021584230953.pdf