Titan Q3 Results: Net Profit Falls 11%, Missing Estimates
Titan Co.’s quarterly profit fell, missing estimates, despite witnessing higher demand for jewellery during the festive season.
Net profit of the country’s largest branded jewellery maker fell 11% year-on-year to Rs 419 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 535.4-crore consensus estimate of analysts tracked by Bloomberg.
The company recognised a loss of Rs 51 crore due to pre-closure of hedging contracts originally designated against sales.
Revenue of the owner of “Tanishq” brand and namesake watches rose 17% over the preceding year to Rs 7,287 crore—against the Rs 7,233.9-crore forecast. Sales in its mainstay jewellery segment, accounting for 89% of total revenue, rose 22% year-on-year to Rs 6,589 crore. Excluding the sale of bullion, jewellery sales increased by 16% in the quarter.
Other Highlights (YoY)
- Operating profit rose 17% to Rs 858 crore.
- Operating margin remained flat at 11.8%.
“There was a significant recovery in the diamond studded segment of the jewellery business,” the company said in an earnings statement. “While coin sales continue to remain high, wedding jewellery segment also witnessed a very good growth in the quarter.”
Recovery in the other segments like Indian dress wear and accessories was still slow, the company said.
Titan has a total of 1,854 stores, including nine Caratlane stores, as on Dec. 31.
“We’re very pleased to see the return to growth in top line for the company and the recording of the highest ever profits in any quarter in the midst of the pandemic that has hit the world so hard,” CK Venkataraman, the company’s managing director, was quoted as saying in a statement.
The recovery witnessed, he said, has been “significantly better than what the company had hoped just a few months back”. “We believe the focus on productivity and cash generation will help improve the company’s margins in the future.”
Shares of Titan ended 1.6% higher before the results were announced compared with the benchmark NSE Nifty 50 index, which remained largely unchanged.