Titan is likely to see another subdued quarter as discretionary demand is yet to pick up. According to a CNBC-TV18 poll, the company's net profit in April-June quarter may rise 13 percent at Rs 201 crore from Rs 177 crore in corresponding quarter last fiscal. Profit is expected to be boosted by lower interest charges and decline in taxes.
Revenues may rise marginally up 1.1 percent at Rs 2924 crore versus Rs 2891 crore in year-ago period.
Q1 EBITDA is seen up 3.2 percent at Rs 283 crore against Rs 274 crore and EBITDA margins may come in at 9.7 percent versus 9.5 percent year-on-year (Y-o-Y).
Analysts polled by CNBC-TV18 say margins may see benefits of hedges and better product mix while margin expansion may be countered by lowered making charges and higher advertising & promotion (A&P) spends.
Jewellery business
Analysts expect another weak quarter for jewellery business owing to absence of original Golden Harvest scheme which contributed to 30 percent to Titan’s jewellery sales earlier. Its flagship brand Tanishq which saw sharp decline in Q4 and may see weakness in Q1FY16.
Growth in jewellery business is seen between contraction of 11 percent to growth of 3-5 percent. New scheme is yet to see traction and is only partially expected to reflect in Q1. Making charges lowered to 8 percent from 12 percent in order to garner volumes may further impact margins. It has reduced its price premium on plain gold jewellery to attract new customers.
Watches and eyewear
Growth for watches seen is at 5-10 percent (Y-o-Y). The management has maintained that watches in the premium segment have continued to see growth. While watch sales in the mid segment may be lacklustre, eyewear again may see some sluggishness.
Titan Company ended at Rs 339.65, up Rs 0.80, or 0.24 percent on the BSE.
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