Difficult To Maintain Margins Amid Gold Headwinds: Titan CFO

Titan Co. has delivered an "exceedingly strong" performance across subsidiaries and its international business in the September quarter, said Chief Financial Officer Ashok Sonthalia.

He noted that gold prices remain a major headwind, pressuring margins and making it "very difficult to maintain current margin levels," he said in a televised conversation with NDTV Profit. Despite this, buyer growth during the festive season has improved compared to the last five to six months, as consumers are gradually adjusting to higher gold prices, he said.

Sonthalia highlighted that premiumisation continues across brands, and analogue categories are expected to sustain double-digit growth. On lab-grown diamonds, he said that the US remains the only market showing significant interest, with limited traction elsewhere.

Titan expects its international business to grow strongly as it expands into geographical adjacencies, though he emphasised that the business will eventually move toward consolidation.

Titan posted a 59.1% rise in second quarter profit in the quarter ended September. The profit in the second quarter stood at Rs 1,120 crore in comparison to Rs 704 crore posted in the same quarter last year.

Its sales were up 22.17% to Rs 16,461 crore in the September quarter. Total expenses of Titan increased 26.3% to Rs 17,316 crore in the September quarter. Titan's total income, which includes other income, was at Rs 18,837 crore, up 28.55% during the September quarter.

• Revenue up 28.8% to Rs 18,725 crore versus Rs 14,534 crore.

• Ebitda up 51.7% to Rs 1,875 crore versus Rs 1,236 crore.

• Margin at 10% versus 8.5%.

• Net profit up 59.1% to Rs 1,120 crore versus Rs 704 crore.

During the quarter, Titan's jewellery business increased 29.3% to Rs 16,522 crore. In the jewellery business, Titan's domestic business, which includes Tanishq, Mia and Zoya, grew 18% to Rs 12,460 crore.

CaratLane's domestic business posted 32% growth, reaching Rs 1,072 crore, over the second quarter financial year, respectively. Its targeted coins promotion offer drove traffic and conversions helping deliver a strong growth for the quarter, it added.