Titan Q1 Results: Profit Rises 54% On Robust Demand, But Misses Estimates
Net profit of the country’s largest branded jewellery maker rose 54% sequentially to Rs 785 crore in the quarter ended June.
Titan Co.’s profit rose as demand revived in the first April-June quarter that wasn’t disrupted by the Covid-19 pandemic in three years. Yet, the earnings missed estimates.
Net profit of the country’s largest branded jewellery maker rose 54% sequentially to Rs 785 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 907-crore consensus estimate of analysts tracked by Bloomberg.
Revenue of the owner of “Tanishq” brand and namesake watches rose 21% over the previous quarter to Rs 9,443 crore—against the Rs 10,073.6-crore forecast.
Other Highlights (QoQ)
Operating profit rose 51% to Rs 1,196 crore—the estimate was Rs 1,324.6 crore.
Margin stood at 12.7% against 10.2%. Analysts had pegged it at 13.1%.
Sales of its mainstay jewellery segment, accounting for 88.4% of total revenue, rose 2.7 times year-on-year and 22% sequentially to Rs 8,351 crore.
Excluding the sale of bullion, jewellery sales rose 208% to Rs 7,600 crore.
Watches and wearables posted 25.7% jump in revenue at Rs 786 crore.
Revenue from the eyecare business grew 36.5% to Rs 183 crore.
Revenue from other business which includes fragrances and Fashion Accessories slowed sequentially from Rs 229 crore to Rs 144 crore.
“The financial year has begun well for us, and we delivered a strong performance in Q1 across our business segments,” said CK Venkataraman, managing director of the company. “Despite challenging macro environment, the outlook for the remaining quarters looks positive and we continue to execute our investment plans in India as well as chosen international geographies.”
The sales growth in jewellery was driven by both buyer and ticket sizes, with new buyer contribution continuing to be quite robust at 46%, the company said in its investor presentation.
Sales during the Akshaya Tritiya quarter rebounded strongly after a three-year gap. While the wedding segment recorded a healthy growth of 178% year-on-year, its contribution to the overall sales was marginally lower.
The studded sales ratio at 26% was moderately better than the pre-pandemic levels for the first quarter, indicating a full recovery, according to Titan.
For watches, too, the wedding season worked “really well” for all brands and channels, especially in April and May. The division ramped up its advertising spends across brands and categories to Rs 67 crore. Despite higher investments, according to the company, the EBIT margin improved to 13.1% (Rs 103 crore), the best over several quarters post-Covid.
Similarly, the eyecare division achieved its highest quarterly revenue on the back of solid demand.
Of its key subsidiaries, CaratLane Trading Pvt. achieved its highest ever sales on the day of Akshay Tritiya, 20% higher than Dhanteras of 2021.
The Tata Group company has added 125 stores during the year.
Its retail chain (including Caratlane) has 2,303 stores across 366 towns with an area exceeding 2.9 million sq. ft. as of June 2022.
Shares of Titan were trading 0.72% higher before the results were announced compared with a flat Nifty 50 as of 2:20 p.m. on Friday.