Titan Q2 net profit up 3.8% at Rs 187 cr, margin expands

Moneycontrol Bureau

Watches-to-jewellery manufacturer Titan Company's net profit grew 3.8 perent year-on-year to Rs 187 crore during second quarter (July-September).

"This was a challenging quarter on account of weak consumer sentiments, particularly for discretionary purchase categories like watches and Jewellery. The continued inflation and the weak rupee are affecting demand as well as costs and interest rates that continue to be at high levels," Bhaskar Bhat, managing director said.

Total income of the company rose 2.3 percent Y-o-Y to Rs 2,329 crore in three-month period ended September 2013, missing analysts' expectations.

According to a CNBC-TV18 poll, analysts on an average had expected Titan to report net profit of Rs 190 crore on revenues of Rs 2,562 crore for the quarter.

Revenues from its watches segment declined to Rs 442.36 crore from Rs 471.8 crore, impacted by input cost increases and adverse currency movements.
Jewellery business of the company grew 4.3 percent Y-o-Y to Rs 1,798 crore in the quarter gone by.

Earnings before interest, tax, depreciation and amortisation climbed 5.2 percent Y-o-Y to Rs 262 crore and operating profit margin rose 20 basis points year-on-year to 11.2 percent despite higher import cost. Analysts had estimated EBITDA at Rs 265 crore and margin at 10.3 percent for the quarter.

Given the good monsoon across the country and a likely change in consumer sentiment driven by stock market movement, the company is hopeful of a good second half.

Titan Company had 1002 retail stores, as on September 2013 with a retail area crossing 13.6 lakh square feet.

The stock closed at Rs 266.30, up 4.15 percent from previous close on the BSE.