Shares of Titan Company Ltd. rose even as its profit for the first quarter missed estimates due to overseas investments and wage settlements.
Net profit rose 6.2 percent year-on-year to Rs 371 crore in the quarter ended June, the jewellery maker said in an exchange filing—lower than the Rs 416-crore estimate of analysts tracked by Bloomberg.
“The profit growth for the company appears subdued due to investments made in biennial overseas conferences for our business associates across all divisions as well as the impact of wage settlement with our unionised employees that was cordially concluded in this quarter,” Bhaskar Bhat, managing director of the company, was quoted as saying in the filing.
Revenue rose 14.4 percent over last year to Rs 4,939 crore, in line with the Rs 5,083-crore estimate.
The company's jewellery business—which generates over 80 percent of its revenue—grew a moderate 13.3 percent due to higher gold prices in June, the company said in a statement accompanying the filing. Income from this division was Rs 4,047 crore against Rs 3,572 crore last year. That, however, was in line with the company's own estimate. In a quarterly update on July 8, the company had indicated a 13 percent growth for the segment.
On the other hand, revenue from other segments grew more than expected. Revenue from the watches segment grew 20.6 percent year-on-year, while the eyewear business' revenue grew 12.9 percent. Revenue from other accessories arm rose 38 percent.
Operating profit rose 13.8 percent to Rs 564 crore in the quarter while Ebitda margin remained flat at 11.4 percent compared with 11.5 percent in the same period last year.
Shares of Titan rose 3.2 percent intraday after the earnings announcement compared with a 1.2 percent advance in Nifty Index.
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