Titan Q2 Results: Profit Surges On Low Base, Demand Recovery
Titan's Q2 profit surged 35.6 times sequentially to Rs 641 crore, aided by a low base.
Titan Co.’s quarterly profit jumped and was in line with estimates, aided by a low base as demand rebounded after local curbs imposed to contain the second Covid-19 wave were lifted.
Net profit of the country’s largest branded jewellery maker surged 35.6 times sequentially to Rs 641 crore in the quarter ended September, according to its exchange filing. That compares with the Rs 671 crore consensus estimate of analysts tracked by Bloomberg.
Other Highlights (QoQ)
Revenue rose 2.2 times to Rs 7,493 crore, against the Rs 6,271-crore forecast.
Operating profit was up seven times at Rs 968 crore against Rs 137 crore.
Margin stood at 13% - a multi-quater high - compared with 3.9%.
Sales of its mainstay jewellery segment, that accounts for 86.7% of total revenue, rose 2.16 times.
"The jewellery division witnessed a demand resurgence and made a strong recovery, " the company said. Other segments like watches and wearables, eyewear as well as fragrance and accessories also saw "strong" recovery.
Walk-ins at malls and large format stores, the owner of Tanishq and Fastrack brands said, recovered to 65% and 70% of the pre-pandemic levels, respectively, with store operational days exceeding 90% for the quarter under review.
Titan, according to its quarterly business update released on the bourses, said tier-2 cities are witnessing better recovery in walk-ins compared to metros.
"Titan's store expansions have gained traction during the quarter, which was partially disrupted in the pandemic period," K Venkataraman, managing director, was quoted as saying in the filing. "Our strong digital presence, combined with offline experience, gives a positive outlook for the overall performance of the company for the rest of FY22."
Apart from the push on digital and omnichannel segments, the Bengaluru-based company accelerated its retail network expansion.
Titan has added 13 stores under the Tanishq brand, eight in the watches and wearables division and 24 in eyewear in the July-September period. It even introduced two CaratLane stores and now has 123 stores under the brand. Overall, the company has 1,969 stores spread across 308 towns.
Titan said its subsidiary, CaratLane, emerged as a strong omnichannel player, the Tata Group firm said. For Q2 of FY22, it clocked revenue of Rs. 289 crore and a profit before tax of Rs. 10 crore compared to revenue of Rs. 148 crore and a loss of Rs. 4 crore in the year-ago period. The aerospace arm of the company, Titan Engineering & Automation Limited, which was impacted severely due to the pandemic, recovered. "The order win and pipeline are robust and supply chain deliveries are improving as shortage of semiconductors and logistics restrictions continue to ease."
Shares of Titan ended flat at Rs 2,460.4 apiece before the results were announced.