Q3 Results: Titan’s Profit Meets Estimates On Higher Jewellery Sales
Net profit of India’s largest branded jewellery maker by market value rose 35 percent on a yearly basis to Rs 416 crore. Analysts tracked by Bloomberg pegged the figure at Rs 399 crore.
The wedding season that coincided with the quarter led to sales rising 34 percent to Rs 5,672 crore. The jewellery segment—which contributes over 80 percent to the company’s revenue—garnered sales of Rs 4,890 crore.
Earnings before income, tax, depreciation and amortisation rose 30.8 percent year-on-year to Rs 585 crore against the estimated Rs 582 crore. Margin contracted 20 basis points year-on-year to 10.3 percent. Gross margin declined 70 basis points to 25.1 percent.
The jewellery segment grew 36.8 percent in the quarter. That’s higher than the 28 percent target for the October-March period. “The wedding season is continuing and we should be able to achieve a 25 percent growth in jewellery and overall growth of 23 percent,”said Bhaskar Bhat, its managing director in a conversation with BloombergQuint.
Bhat also said the fall in margin compared to same period last year was due to rescheduling of advertisement costs in the watch segment and further provisions made due to its exposure to debt-laden Infrastructure Leasing & Financial Services group.
Watch interview here
Titan, with an exposure of Rs 145 crore to the IL&FS group, made provision worth Rs 70 crore in the December-ended period. It had made provisions worth Rs 29 crore in the previous quarter.
Shares of the jewellery maker closed 0.4 percent lower to Rs 991.55 apiece ahead of the earnings announcement, compared with the benchmark’s Nifty 50 Index’s 0.58 percent gain.
New Managing Director
The company announced CK Venkataraman's elevation as the company's Managing Director, with effect from Oct. 1. He will replace the interim MD, Bhaskar Bhat, who is set to retire on Sept. 30.
Venkatraman is the current chief executive officer of the company's jewellery business. The formal process to induct Venkat on the Board of the company and his appointment as MD of Titan will be completed in due course, subject to shareholders' approval, the company said in a separate exchange filing.
Other Segments (YoY)
- Sales of watches grew 18.7 percent to Rs 640 crore. However, its margin narrowed to 8.5 percent from 15.3 percent.
- Titan’s eyewear sales soared 387 percent in the quarter to Rs 129 crore. Its margin, however was negative 1.2 percent from last year’s negative 4.7 percent, thereby narrowing losses while gaining traction.
- Sales of the company’s other offerings rose 69.9 percent to Rs 37.2 crore, with margin improving 25.6 percentage points to negative 30.6 percent.