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Titan Ltd, a renowned jeweller and watchmaker, reported a 25% decline in its net profit for the quarter ending September 30, 2024, reaching Rs 705 crore. This marked a significant drop compared to the Rs 940 crore profit recorded in the same period last year. The company's performance fell short of market expectations, as analysts had anticipated a net profit of Rs 1,028 crore for the quarter.
Despite the decline in profit, Titan experienced a substantial growth in its total income. The company's total revenue surged 24% to Rs 12,458 crore in Q2FY25, compared to Rs 10,027 crore in Q2FY24. This upward trend can be attributed to strong performance in the jewellery segment, which witnessed a 26% year-on-year increase in total income, reaching Rs 10,763 crore. The company highlighted that the Indian business specifically experienced a 25% growth during the same period.
The jewellery segment's success can be partly attributed to the reduction in custom duty, which rekindled consumer interest in gold as prices temporarily eased. The resulting gold rush extended into mid-September, contributing to healthy buyer growth and a rise in average selling prices. Both factors exhibited double-digit growth during the quarter. As part of its expansion strategy, Tanishq, one of Titan's jewellery brands, opened 11 new stores in India during the quarter.
Despite the positive performance in the jewellery segment, Titan's Earnings before Interest & Tax (EBIT) declined by 17.5% to Rs 1,128 crore in Q2FY25 compared to Rs 1,367 crore in Q2FY24. The company attributed this decline to the impact of custom duty losses and investments in the growth of various businesses.
Titan's Managing Director, CK Venkataraman, expressed optimism about the company's future performance, stating that the quarter witnessed encouraging growth across key businesses. He highlighted the strong double-digit growth in the jewellery sector, emphasizing the success of the company's portfolio approach in catering to diverse customer needs through brands like Tanishq, Mia, Zoya, and CaratLane. Venkataraman also mentioned the significant 25%+ growth in analog watches compared to the previous year, accompanied by a corresponding increase in sales volumes. He stressed that the Titan brand continues to be a preferred choice for Indian consumers in this segment. While acknowledging the depressed profitability in Q2 due to custom duty related losses and investments, he expressed confidence in the competitiveness of each of the company's businesses and remained optimistic about their performance for the remainder of the financial year.
Source: Titan Q2 net profit declines 25% to Rs 705 crore, misses estimates