Titan Q4 Results: Profit Falls 7% On Lower Demand For Gold Jewellery

Titan Co.'s fourth-quarter profit fell as its mainstay jewellery business took a hit on account of partial lockdowns, volatility in gold prices and global uncertainties. But the numbers surpassed analyst estimates.

Net profit of the country's largest branded jewellery maker declined 7% year-on-year to Rs 491 crore in the quarter ended March, according to its exchange filing. That compares with the Rs 454.4-crore consensus estimate of analysts tracked by Bloomberg.

Other Highlights (YoY)

• Revenue, excluding bullion sale, fell 2% over a year earlier to Rs 6,977 crore—against the forecast of Rs 7,290 crore.

• Operating profit fell 2% to Rs 782 crore—the estimate was Rs 884.5 crore

• Operating margin stood at 10.7% vs 11.1%. Contraction stemmed from pressure on the jewellery division's margin.

Sales of its jewellery segment, accounting for 89% of total revenue, fell 4% year-on-year to Rs 6,132 crore. Watches and wearables grew 12% over the previous year to Rs 622 crore, and eyecare division grew 6% to Rs 134 crore.

"Despite frequent disruptions in the quarter owing to Covid wave 3 and other geo-political factors, the quarter has been satisfactory in terms of growth and profitability," said CK Venkataraman, the company's managing director, in the statement. "The company is well-prepared and looking forward to an exciting Q1 with its stores ramped up for a much-awaited Akshaya Tritiya festival."

Demand deferment for jewellery, the company said, was visible in the wedding category with 9% year-on-year decline in revenues. Other categories, however, grew 2%, cushioning the overall impact. While studded revenues rose 7% and the ratio in the overall mix improved 400 basis points, the plain jewellery segment declined 4% over last year.

The growth in watches and wearables division was entirely value-led with volumes remaining flattish, the company said. All Titan brands including Fastrack, Sonata and Xylys together grew 12% over a year earlier. West and north regions saw higher growth.

• An increase in sales from departmental stores and e-commerce drove a 34% year-on-year growth for its fragrances and fashion accessories.

• Online jewellery story CaratLane, 72.3% owned by Titan, reported a flat profit of Rs 11 crore (before taxes and exceptional items)

• Titan Engineering & Automation Ltd.'s profit more than doubled to Rs 21.

Saree store Taneira grew 4% year-on-year. The division launched stores in Jamshedpur and Lucknow, extending presence to eight cities and taking the count of outlets to 20.

Titan added 269 stores in FY22, taking its total count to 2,178 in 337 cities. "With international expansion in GCC markets and the first Tanishq store coming up in the U.S., we are also gearing up to touch new horizons in FY23," Venkataraman said.

Shares of Titan ended 2.95% lower on Monday compared with a 0.2% decline in Nifty 50. The results were announced on Tuesday—a market holiday.