Rakesh Jhunjhunwala’s biggest bet Titan Company is set to report its earnings for the fourth quarter of the fiscal year 2025 on May 8. Soaring gold prices and rising competition are expected to impact the jewellery player's bottom line.
According to a Moneycontrol poll of six brokerages, the Caratlane parent is likely to report a 14.6 percent revenue growth at Rs 12,904 crore. Net profit is likely to come in at Rs 824 crore, jumping 7.1 percent from Rs 786 crore in the corresponding quarter last year.
There is a serious divergence in the earnings estimates of different analysts polled by Moneycontrol as some analysts. The most optimistic estimate sees net profit rising 16.7 percent, while the most pessimistic estimate sees profit falling 2.2 percent.
What factors are impacting the earnings?
On a sequential basis, both net profit and revenue are likely to take a sharp hit as demand slips amid soaring jewellery prices.
Rising gold prices: Kotak Institutional Equities modeled ~14 percent YoY growth in standalone jewelry sales (excluding sale of gold bullion; versus 25.5 percent YoY growth in Q2/Q3FY25), weaker than management’s expectation in the beginning of quarter (growth delivery in line with 9M performance), largely due to sharp surge in gold prices (up 15-20 percent since December-end).
Margins: The sharp increase in gold prices is expected to impact gross margins. EBIT margins are likely to remain under pressure due to multiple factors, including a lower studded jewelry mix, negative operating leverage, rationalization of gold rate mark-ups, aggressive exchange offers to attract customers, and rising competitive intensity.
Segment performance: Motilal Oswal expects healthy double-digit growth in watches,
eyewear, and other business. Kotak Institutional Equities expects 14 p growth in watches division and ~17.5 percent growth in eyewear.
What to look out for in the quarterly show?
Analysts will closely monitor purchase trends as gold prices have been recording fresh highs.
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