Titan Q1 net up lower-than-expected 9% at Rs 156 cr

Watches to jewellery and eyewear maker Titan Industries ' first quarter net profit rose a lower-than-expected 9% year-on-year at Rs 156 crore due to weak consumer demand, sending its shares down 3% in afternoon trade.

Net sales were up 9% at Rs 2,205.7 crore, in April-June, which was an "extremely challenging" quarter according to the Bangalore-based company.

Analysts on average had expected Titan to report a net profit of Rs 166 crore, on revenue of Rs 2,470 crore according to a CNBC-TV18 poll.

"Gold in rupee terms touched its peak at Rs 3,067 per gram of 24 karat during the quarter, thus affecting the growth of jewellery...The reduction in wedding dates during the quarter has also affected both watches and jewelery," Titan said on Tuesday.

The company's revenue from watch business was up 14% from a year ago to Rs 361 crore, while jewellery income rose 8% to Rs 1,776 crore in the first quarter.

Titan's other businesses, which include eyewear, precision engineering and accessories grew 16% to Rs 90 crore in the quarter.

"The first quarter has been disappointing by way of sales growth due to several factors leading to a weak consumer sentiment. Consumer response was good only to discount offers, thereby impacting margins, specially in watches and eyewear," said Bhaskar Bhat, MD.

Looking ahead, Bhat expects high inflation, a weak rupee and poor monsoon are likely to have "adverse impact" on titan's targeted growth.

However, he said, the company will maintain its investments in brand building, retail network expansion and new product introductions to boost consumer confidence.

Titan opened 20 stores in the first quarter and had 847 outlets as of June 30.

At :14:00 hrs, Titan shares were down 3.1% at Rs 225.85 on NSE.