Gold bangles are seen for sale in a jewelry shop (Photographer: Kerem Uzel/Bloomberg)

Q4 Results: Titan’s Profit Hit By Lower Operating Margin

Titan Company Ltd.’s lower operating margin and exceptional loss in the January-March period has had a bearing on the company’s profit.

Net profit of India’s largest branded jewellery maker was up 4.4 percent year-on-year to Rs 294.6 crore in the fourth quarter of financial year 2018-19. Analysts tracked by Bloomberg had estimated the figure at Rs 401 crore. Margin of the company contracted by 90 basis points to 9.7 percent.

Revenue for the quarter was up 20.7 percent to Rs 4,671 crore on a yearly basis, which was in-line with analysts’ expectations of Rs 4,673 crore. The jewellery business—which contributes over 80 percent to the company’s revenue—garnered sales of Rs 3,985 crore.

Among its exceptional items for the January-March period, early retirement schemes accounted to Rs 5.7 crore, while impairment of investments in subsidiary Favre Leuba was worth Rs 70 crore.

The company also reported additional provisions of Rs 46 crore towards impairment of deposits exposed to IL&FS. This makes the total provisions for the year at Rs 145 crore.

Other Highlights:

  • Earnings before income, tax, depreciation and amortisation rose 11.3 percent on a year-on-year basis to Rs 455 crore against an estimated Rs 562 crore.
  • Gross margins are down 90 basis points to 27.2 percent.
  • The jewellery segment grew 21 percent in the reported period. That compares to the company’s target of 24-25 percent for the quarter.

Titan has been confident of expanding its market share in the jewellery business despite higher gold prices.

Also read: Titan Sees Strong Revenue Growth For Third Straight Fiscal