Titan Company Limited, one of the largest fashion accessories brands in India with strong presence in jewelry, watches and eyewear, on October 27 declared its results for the second quarter ending September 30, 2021. It has reported a consolidated profit after tax of Rs. 641 crore for the quarter, increasing from Rs 173 crore reported in the same quarter last year. It had reported a profit of Rs 18 crore in June-21 quarter when the demand was impacted due to COVID restrictions.
The consolidated revenues from sale of products/services came in higher by 76 percent at Rs 7,243 crore for the quarter, compared to Rs 4,127 crore in September 2020 quarter. Revenues in Q1FY22 stood at Rs 3,004 crore.
The surge in revenues was aided by a strong YoY growth of more than 70 percent across all its business segments as COVID-related restrictions eased out, footfalls increased and the average operational store days increased over 90 percent during the quarter.
The company stated that, riding on the strong recovery in demand across its consumer businesses, Titan's revenue excluding bullion sales grew by 78 percent in Q2 FY22 compared to Q2 FY21.
Commenting on the performance of the company, CK Venkataraman, Managing Director, said, "Titan's strong growth this quarter was underpinned by demand recovery being witnessed in all segments of the company”.
He further stated that the company’s stores were fully operational, returning to pre-pandemic normalcy in most parts of the country with continued focus on health and safety of customers, business partners and employees.
Business performance
The Jewelry division recovered strongly post lockdown-2 because of pent-up demand and an increase in planned sales of jewelry. It recorded a consolidated income of Rs 6,571 crore with 65 percent growth in this quarter compared to Rs. 3,983 crore in previous year (excluding bullion sale in both the periods). The Watches and Wearables business recorded an income of Rs 689 crore with 72 percent growth in this quarter compared to Rs. 401 crore in previous year. The Eyewear business grew by 70 percent in this quarter and registered revenues of Rs 160 crore compared to Rs 94 crore last year. The other segments of the company comprising Indian dress wear, fragrances & accessories declined 12 percent on a consolidated basis to Rs 99 crore in this quarter from Rs 113 crore in the previous year.
Titan Engineering & Automation Limited (TEAL) suffered due to a shortage of semiconductors and logistics restrictions. Its revenues for the quarter came in at Rs 51 crore and a loss of 1 crore compared to revenue of Rs 89 crore and profit before tax of Rs 18 crore last year. The company says that the order win and pipeline in this business are robust and supply chain deliveries are improving as continue to ease.
Robust performance in both online and offline channels helped CaratLane Trading Private Limited to do well and it is now emerging as a strong omni player. It clocked revenue of Rs 289 crore and a profit before tax of Rs 10 crore this quarter compared to revenue of Rs. 148 crore and a loss of Rs. 4 crore last year.
Margins
Higher sales had a positive impact on the EBIT across segments. EBIT for Jewelry business had a robust increase of 180 percent to Rs 803 crore from Rs 286 crore in the previous year. Watches and wearables became EBIT positive from –Rs 12 crore in the same quarter last year to Rs 90 crore in this quarter. EBIT for eye wear increased more than 300 percent from Rs 9 crore last year to Rs 37 crore in this quarter. Others moved in the other direction and came down from positive EBIT of Rs 7 crore last year to –Rs 3 crore.
The company was able to improve its net margins significantly by 500 bps from 4 percent in the last year to 9 percent in this quarter.
The company added 60 stores in the first half of this year, taking the total number of stores to 1,969 in 308 towns. The company now has an operational area of more than 2.6 million square feet (including Caratlane).
“Titan's store expansions have gained traction during the quarter, which was partially disrupted in the pandemic period. Our strong digital presence combined with trusted offline experience gives a positive outlook for the overall performance of the Company for the rest of the fiscal year.", Venkataraman added.
The stock closed at Rs 2,460 today, up by Rs 5.35 (0.22 percent) from its previous day’s close. The stock has appreciated by more than 100 percent over the last one year, 57 percent during this year, 42 percent over the past 3 months and 17 percent in the past one month.
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