Titan Q4 Results: Profit Surges 66%, Margin Contracts
An employee holds a 50-gram gold coin for a photograph inside a Titan Co. Tanishq jewelry store in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Titan Q4 Results: Profit Surges 66%, Margin Contracts

Titan Company Ltd.’s quarterly profit surged surpassing estimates on the back of jewellery and eyewear sales. Its margin, however, contracted.

Net profit of the country’s largest branded jewellery maker rose 66% year-on-year to Rs 568 crore in the quarter ended March, according to its exchange filing. That compares with the Rs 549-crore consensus estimate of analysts tracked by Bloomberg.

Revenue of the owner of Tanishq brand rose 59% over a year earlier to Rs 7,494 crore—against the forecast of Rs 7,516.8 crore. Sales of its mainstay jewellery segment, accounting for 88% of total revenue, rose 71% year-on-year to Rs 6,678 crore.

Other Highlights (YoY)

  • Operating profit rose 33% to Rs 817 crore.
  • Operating margin stood at 10.9% vs 13.0%. Contraction stemmed from pressure on jewellery division's margins.

Revenue of Titan Co.’s jewellery and eyewear divisions grew and its watches division recovered.

“The jewellery division ran a diamond studded promotion in the quarter and that led to good recovery of the studded segment of the business,” the company said in its exchange filing. The studded ratio—or ratio of studded jewellery to gold—continued to lag over last year, with sales of gold coins remaining high.

Revenue of watches and wearables business rose 18% year-on-year to Rs 127 crore. Revenue of its Indian dress wear and accessories was segment fell 16.6% over a year ago to Rs 35 crore.

The company said it’s aerospace arm, Titan Engineering and Automation Ltd., was impacted severely due to the pandemic even as its automation solutions business performed well.

CaratLane, which sells jewellery online and offline, ended the quarter with profit before tax of Rs 10 crore.

“The financial year ended March 2021 has indeed been a most testing one for the company with the pandemic hitting its operations very significantly, particularly in the first half of the financial year,” CK Venkataraman, managing director at Titan, was quoted as saying in the release. “While the profits before tax and exceptional items for the year are lower than the previous year, mainly due to the impact of the pandemic on the business mix, the company did exceptionally well on the cost optimisation program and cash generation front.”

Shares of Titan ended 0.3% lower before the results were announced compared with a 0.2% rise in the benchmark NSE Nifty 50 index.

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