Titan Co.'s profit was nearly wiped out as local lockdowns to contain the severe second wave of the Covid-19 pandemic hurt demand. Still, it beat estimates.
Net profit attributable to shareholders of the country's largest branded jewellery maker fell 96.5% over the preceding quarter to Rs 20 crore in the April-June period, according to its exchange filing. A consensus of analysts tracked by Bloomberg had estimated loss for the company at Rs 33.5 crore.
Highlights (QoQ)
Revenue of the owner of Tanishq and Fastrack brands fell 53.6% to Rs 3,473 crore, against the Rs 2,903.6-crore forecast.
Sales of its mainstay jewellery segment, that accounts for 86.7% of total revenue, declined 54.3% to Rs 3,050 crore.
Operating profit fell 83.2% to Rs 137 crore.
Operating margin stood at 3.9% against 10.9%.
“While we started the quarter with strong business momentum, the second wave of the pandemic severely disrupted it… [But] the learnings and experience of the past year helped us navigate this quarter's turbulence much more efficiently,” CK Venkataraman, managing director at Titan, was quoted as saying in the statement.
Enrolments in the golden harvest scheme has picked up and going forward, it looks good, Ajoy Chawla, chief executive of Titan's jewellery division, told investors on a conference call following the earnings announcement. Sales from Tamil Nadu, a key market, has continued to do well for Tanishq, he said.
“We have seen certain pent-up demand on account of gold and studded jewellery from missed milestones (birthday and anniversaries) and seeing evidence of it in June and July," Chawla said.
He said people buying jewellery for birthdays and anniversaries are becoming growing trend for the company. Customers are also advancing their wedding purchases.
In watches, the company has witnessed a faster recovery compared to preceding year and recovery in wearables is faster than watches, albeit on a lower base.
In the eyewear segment, Titan thinks the opportunity is large and business is doing well. It's looking to scale its presence in bigger cities and smaller towns.
As the restrictions eased in different parts of the country in June and pace of vaccination increased, Venkataraman said, the company saw demand coming back steadily. Titan is optimistic about its overall performance.
Shares of Titan closed 2.1% lower before the results were announced compared with a 0.8% rise in the benchmark Nifty 50.
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