Jeweller and watchmaker Titan Ltd on August 2 said its standalone net profit fell by 1 percent to Rs 770 crore in the June quarter as compared to Rs 777 crore in the year-ago period as higher gold prices deterred demand.
However, the firm's standalone revenue from operations rose 10 percent to Rs 11,105 crore in Q1FY25 as compared to Rs 10,103 crore in Q1FY24.
A Moneycontrol poll of eight brokerage estimates pegged Titan's fiscal first quarter net profit at Rs 771 crore and revenue at Rs 12,185 crore, with fewer wedding days in the quarter limiting sales growth, and high competition and pricing pressures dragging profitability.
On August 2, Titan's shares on BSE closed 0.5 percent lower at Rs 3,450 apiece.
CK Venkataraman, Managing Director of the Company, stated: "In the recently presented Union Budget, the custom duty on gold imports in the country has been reduced from 15 percent to 6 percent. This development has long-term positive implications for the jewellery industry. While this change is likely to entail a short-term impact in the form of value loss on duty paid gold inventory (expected to be expensed over the next two quarters), we remain optimistic on the longer-term benefits as it makes the market equitable for large businesses like ours."
The jewellery segment reported total standalone income for the quarter grew nine percent over Q1FY24 at Rs 9,070 to Rs 9,879 crores. The India business grew eight percent in the same period. EBIT at Rs 1,103 crores came at a margin of 11.2 percent for the quarter.
The first 6 weeks of the quarter that including Akshaya Tritiya saw a 20% YoY retail growth. In India, 11 new stores (net) were added in Tanishq, 19 stores in Mia and 3 stores in Zoya respectively. Zoya opened its first store in the cities of Chennai and Pune. CaratLane added 3 new stores (net) in the quarter taking the total store count to 275 stores spread across 112 cities pan-India.
The international jewellery business recorded a growth of 92 percent YoY to Rs 350 crore.
Watches & Wearables standalone business recorded a total income of Rs 1,021 crores, up 15 percent over Q1FY24 Rs 890 crore. The domestic business grew 14 percent in the same period. EBIT came in at Rs 115 crores clocking a margin of 11.3 percent for the quarter.
17 new stores (net) were opened during the quarter taking the total exclusive brand outlet presence to 1,137 stores. Of this, 5 stores were added in Titan World, five in Helios, and seven in Fastrack respectively.
While volumes in wearables segment clocked healthy double-digit growths, the average selling prices continued to decline leading to six percent YoY drop in revenue.
The consolidated watches segment grew around 79 percent YoY primarily comprising of growth from analog exports.
In the EyeCare segment total income grew three percent to Rs 209 crores in Q1FY25 over Q1FY24. The business recorded an EBIT of Rs 20 crores
clocking a margin of 9.6 percent for the quarter.
Advertising spending grew around 24 percent YoY with an increase in promotional activities. This division added three new stores (net) during the quarter in Titan Eye+.
As per the company statement, "Q1 saw multiple forces coming together that impacted topline; a steep rally in gold rates (20% YoY), election-led restrictions in many markets, very few wedding dates (5% growth in wedding sales YoY) and an unprecedented heat wave across the country."
In Emerging Businesses, Taneira's revenue grew around four percent YoY. The brand opened four new stores during the quarter, two of them in the new cities of Jodhpur and Nashik.
The Fragrances & Fashion Accessories revenue grew around four percent YoY. Within businesses, Fragrances grew by about 13 percent YoY and Fashion Accessories saw a decline of around 15 percent YoY.
Venkataraman also said that the first quarter performance reflects mixed consumer trends in lifestyle categories. While the inclement weather conditions during the summers, general elections and lower wedding days impacted retail walk-ins, the growth metrics in Watches & Wearables and EyeCare were quite healthy.
"Notwithstanding some of these near term variations, Titan is steadfastly pursuing market share gains across all business categories and is well equipped to provide a differentiated retail experience to our valued customers. We remain optimistic about our performance for the rest of the financial year," he added.
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