Jewellery, watches, and eyewear maker Titan Company registered a 10.9 percent year-on-year decline in standalone profit at Rs 419 crore for the quarter ended December 2020, dented by impairment provision for FLAG investments.
The company made a provision for Rs 137 crore relating to impairment in the investments in Favre Leuba AG (FLAG), a wholly-owned subsidiary, consequent to the decision of the company to significantly scale down the operations outside India.
"The very impressive festive season growth led the company to its highest ever quarterly profit with profit before tax and exceptional items of Rs 765 crore, compared to Rs 637 crore in the previous year, a growth of 20 percent for the quarter," Titan said in its BSE filing.
Standalone revenue grew by 17.4 percent year-on-year to Rs 7,287 crore in Q3FY21, including sale of gold bullion to the extent of Rs 340 crore.
Titan Company said it reported a return to year-on-year growth in sales in Q3FY21 led by an impressive festive season recovery in the Jewellery division.
While the jewellery business grew by 16 percent (excluding gold bullion sales) over the corresponding quarter of the previous year, the watches and wearables and eyewear divisions also did well with the recovery rate for the quarter being 88 percent and 93 percent, respectively, the company added.
"The recovery witnessed has been significantly better than what we had hoped just a few months back. We believe the focus on productivity and cash generation will help improve the company's margins in the future," said C K Venkataraman, Managing Director.
Jewellery division recorded revenue at Rs 6,589 crore in Q3FY21, growing 21.8 percent compared to corresponding period and its earnings before interest and tax (EBIT) rose 7.3 percent to Rs 752 crore in Q3 YoY.
"There was a significant recovery in the diamond-studded segment of the jewellery business. While coins sales continue to remain high, wedding jewellery segment also witnessed a very good growth in the quarter," said Titan.
At the operating level, Titan reported a 16.7 percent year-on-year growth in standalone EBITDA (earnings before interest, tax, depreciation and amortisation) at Rs 858 crore and margin contracted 10 bps to 11.8 percent in Q3FY21 compared to year-ago period.
More or less numbers were in-line with analysts' estimates. Profit was estimated at Rs 550 crore on revenue of Rs 7,350 crore and EBITDA was expected at Rs 850 crore with margin at 11.6 percent for Q3FY21, according to the average of estimates of analysts polled by CNBC-TV18.
The company's retail chain (including CaratLane) stood at 1,854 stores as of December 2020 with a retail area crossing 24 lakh square feet for all its brands covering 292 towns.
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