Though the Street is not expecting any fireworks from Titan Company’s October-December quarter (Q3) numbers, the jewellery and watchmaker is expected to put up a decent show. The Tata group company is estimated to report a post-tax profit of Rs 985 crore on revenue of Rs 10,656 crore, according to an average of estimates by five brokerages polled by Moneycontrol.
While net profit will grow 22 percent sequentially, it will be largely flat year-on-year (YoY) due to a high base. In Q3 FY22, the company’s net profit had zoomed 91 percent YoY on the back of pent-up demand after COVID-19 lockdowns.
“Titan is likely to report optically weak numbers off an exceptionally strong wedding season base of Q3 FY22 and Q3 FY21,” noted analysts at Motilal Oswal Financial Services.
In its Q3 business update, the company has already informed that combined sales for the quarter grew 12 percent, with maximum growth recorded by the 'emerging businesses' category at 75 percent. This includes fragrance and fashion accessories, and Indian dress wear sold under the Taneira brand.
A total of 111 new retail outlets were added in the quarter across businesses, taking the total count to 2,362.
Keeping the base effect aside, demand momentum continues to be robust, led by the festival season and stable gold prices during the quarter, believe analysts. The Street is forecasting 11 percent growth YoY in the jewellery segment.
The watches & wearables segment is set to register 14 percent growth, while sales from the eyecare business will grow 10 percent YoY, said MOFS.
Meanwhile, Kotak Institutional Equities is factoring in earnings before interest and taxes (EBIT) margins at 13.4 percent for jewellery business, 13.8 percent for watches, and 15.5 percent for eyewear.
On an overall basis, operating margins will contract over 100 basis points (bps) YoY as the base quarter had a one-time gain of higher studded realisation, it added.
One basis point is one-hundredth of a percentage point.
As per brokerages, the key factors to watch out for will be ― outlook on international business expansion, volume growth trend, commentary on market share gains in the South, update on inventory levels, and capital base movement.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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