Titan Co.'s quarterly profit fell as tepid demand for jewellery and higher expenses hurt margins.
Consolidated net profit of the country's largest branded jewellery maker fell 10% over the previous year to Rs 904 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 1,005.52-crore consensus estimate of analysts tracked by Bloomberg.
Revenue of the owner of Tanishq brand and watches rose 16% year-on-year to Rs 11,609 crore—against the Rs 11,065.3 crore forecast.
Titan Q3 Highlights (YoY)
Operating profit was down 7% to Rs 1,347 crore, compared to an estimate of Rs 1,485.45 crore.
Margin stood at 11.6% against 14.4% on higher expenses. Analysts had forecast it at 13.4%.
Expenses jumped 19.5% to Rs 10,454 crore.
Sales of its mainstay jewellery segment, accounting for 89.9% of total revenue, rose 15.3% year-on-year to Rs 10,446 crore. The pace of growth, however, slowed on tepid demand this festive and wedding season.
Excluding the sale of bullion, jewellery sales rose 12.5% to Rs 10,131 crore.
Titan's digital sales for jewellery now account for 16% of revenue.
Here's how its other segments fared:
Watches and wearables business, which comprise 7% of sales, posted a 14.2% rise in revenue over the previous year to Rs 811 crore.
Eyecare division saw 11.5% growth in revenue to Rs 174 crore.
Revenue from other business, which includes fragrances and fashion accessories, surged 59.4% to Rs 214 crore. But the segment posted a loss of Rs 16 crore in Q3 as against a profit of Rs 4 crore last year.
"The quarter witnessed a strong festive consumer demand," said CK Venkataraman, managing director of the company. "We continue to pursue market share growth and are actively investing in capabilities across all of our business segments. Our international endeavour is shaping well."
The Tata Group firm added 111 stores across its consumer businesses to take the total count to 2,362, as on Dec. 31. Its retail network comprises 685 jewellery stores, 863 eyecare outlets and 36 Taneira stores, among others.
Of the key subsidiaries, Caratlane Trading Pvt. reported total income of Rs 677 crore for the third quarter, up 51.3% over the same period last year. It was driven by gifting campaigns around the festive season, from the beginning of Navratri and continuing till Bhai Dooj, to capture consumer buying intent.
Titan Engineering and Automation Ltd. saw a 53% jump in total income to Rs 125 crore. The automation solutions division saw one of its highest ever order inflows of Rs 250 crore during the quarter. "The order pipeline and enquiries continue to be healthy," according to its investor presentation.
Shares of Titan closed 1.8% lower on Thursday after the results were announced, as compared to a flat benchmark Nifty 50 index.
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