Titan Co.'s quarterly profit rose, beating estimates, driven by its mainstay jewellery business as well as watches and wearables.
Net profit of the country's largest branded jewellery maker rose 30% over the previous year to Rs 831 crore in the quarter ended September, according to its exchange filing. That compares with the Rs 732.75-crore consensus estimate of analysts tracked by Bloomberg.
Revenue of the owner of Tanishq brand and namesake watches rose 22% over the previous year to Rs 9,163 crore—against the Rs 8,580.9 crore forecast.
Sequentially, however, revenues dropped 3% as demand slowed on the back of rise in gold prices.
Titan Co. Q2 Highlights (YoY)
Operating profit rose 29% to Rs 1,247 crore compared to an estimate of Rs 1,106.5 crore.
Margins stood at 13.6% against 12.9%. Analysts had pegged it at 12.9%.
Cost of materials consumed rose 50.9% to Rs 7,479 crore.
Advertising expenses shot up 66% to Rs 224 crore.
Sales of its mainstay jewellery segment, accounting for 87% of total revenue, rose 21.7% year-on-year to Rs 7,997 crore.
Excluding the sale of bullion, jewellery sales rose 18% to Rs 7,203 crore on a high base of the corresponding period of FY22 that had elements of pent-up demand and spillover purchases of a Covid-disrupted Q1 FY22.
The product mix in the jewellery division improved compared to last year but continued to be below pre-pandemic levels.
"Walk-ins grew in low double digits year-on-year with steady buyer conversions," the Tata Group company said.
Revenue from watches and wearables business grew 20.46% year-on-year to Rs 830 crore, clocking its highest quarterly revenue.
Eyecare business posted 4.37% increase in revenue at Rs 167 crore. Profit before tax, however, fell 24% to Rs 28 crore as the company invested on advertisement and paid higher rentals on network expansion.
Revenue from other business, which includes fragrances and fashion accessories, rose to Rs 196 crore from Rs 99 crore, a growth of 98%.
It reported a loss of Rs 2 crore, as against a loss of Rs 3 crore last year, as Titan has been investing in building the brands and scale.
"Despite an uncertain macro environment, the current festive season starting from end of September and continuing till end of October has been quite positive and the consumer confidence remains upbeat," said CK Venkataraman, managing director of the company.
"We have clocked retail growth of 17-19% in larger business divisions of the company, namely jewellery, watches and wearables, and eyecare over similar festive season timeline of the previous year," he said.
Titan added 105 stores in its retail network in the second quarter of the current fiscal, taking its total count to 2,408 stores across 382 towns.
Of the key subsidiaries, Caratlane Trading Pvt. reported a revenue of Rs 445 crore for the second quarter, compared to Rs 288 crore over the same period last year. Profit before tax rose 90% to Rs 19 crore.
Titan Engineering and Automation Ltd. reported 2.4 times rise in revenues to Rs 123 crore. Profit before taxes came in at Rs 13 crore, compared with a loss of Rs 1 crore in the corresponding quarter of the previous year.
Shares of Titan closed 0.23% higher before the results were announced, compared with a 0.36% rise in the Nifty 50 on Friday.
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