Titan Company Q1 Profit Down 4.3% at Rs 756 Crore, Misses Estimates; Jewellery Biz Top Performer in 2023
Titan Company reported operating sales of Rs 11,897 crore, up 26% from Rs 9,443 crore in Q1FY23.
Titan Company reported its first quarter earnings at Rs 756 crore, below forecasts and down 4.3% from Rs 790 crore in a similar time the previous year. It said operating revenue of Rs 11,897 crore, a 26% increase from Rs 9,443 crore in Q1FY23. CNBC TV18 predicted Titan Company’s first-quarter profit of Rs 860 crore and revenue of Rs 10,300 crore. Titan Company’s total costs for the quarter were Rs 11,009 crore, compared to the quarter’s total income of Rs 12,011 crore.
Titan Company’s watches and wearables business reported total sales of Rs 913 crore, an increase of 16.2% year over year. “Premiumization theme was at the fore with Titan and International brands seeing strong buying momentum clocking handsome double-digit growths in the analogue segment,” the firm stated. According to Titan Company, the Fastrack brand in the category has expanded quickly, recording significant portfolio-wide growth.
The jewellery industry earned a total of Rs 10,696 crore, representing a 28.1 per cent increase over the prior year. During the same period, the Indian business expanded by 20% thanks to solid demand during Akshaya Tritiya and an alluring gold exchange programme. “Business also undertook investments for growth through aggressive exchange offers, brand-building initiatives, and pricing rationalization programmes to gain market share,” the statement read.
The eyecare sector recorded quarterly revenues of Rs 203 crore, an increase of 10.9% from Rs 183 crore in Q1FY23.
Fragrances, fashion accessories (F&FA), and Taneira made up the whole income of Titan Company’s growing businesses, which generated Rs 76 crore on a standalone basis. Taneira increased by 81 per cent over the same time the previous year, while F&FA expanded by only 12 per cent.
“We are off to a strong start this year, with double-digit sales growth in all business sectors. According to CK Venkataraman, managing director of Titan Company, the jewellery industry, we have remained the top performer, growing by 19% yearly.
Comparing Q1FY23 to Q1FY24, CaratLane’s overall revenue increased by 32% to Rs 640 crore, and its profit before taxes was Rs 14 crore with a margin of 2.1%. In contrast, Titan Engineering and Automation Limited reported total revenue of Rs 61 crore, a 32% decrease from Q1FY23. Twelve crore rupees were lost throughout the quarter.
“Order booking in the manufacturing services business was robust with the aerospace industry witnessing an all-time high order bookings and passenger traffic reaching pre-Covid levels, both domestically and internationally,” the report added. After the quarter, the Automation Solutions division had a healthy order position of more than Rs 500 crore.
“We are working to increase our market share across categories, and we are also enhancing our skills and growing our retail network. Our overseas venture is also coming quite nicely. CK Venkataraman said we’re still confident about how the rest of the fiscal year will go.
Titan Company Limited, one of India’s leading manufacturers of watches, jewellery, eyewear, and other lifestyle products, reported a 4.3% drop in its profit for the first quarter of 2023, with a net profit of Rs 756 crore. This fall in profit has come as a disappointment for market analysts, as the figures missed the expected estimates.
The company’s consolidated revenue stood at Rs 6,213 crore, a 3.7% increase compared to last year’s quarter. While the top line displayed moderate growth, the drop in net profit raised concerns among investors and stakeholders.
The jewellery division has proven to be the star performer for Titan, registering a growth of 5.6% compared to the same period last year. The successful launch of new collections and a positive response from consumers to marketing campaigns drove the sales.
The watch segment experienced a decline of 1.5%, reflecting the challenging market conditions. The slowdown in discretionary spending and increased competition from smartwatches impacted this segment.
The eyewear segment witnessed a flat growth rate, while other features, like fragrances and accessories, showed mixed results.
Several factors contributed to the decline in Titan’s profit:
- Increased Operating Costs: Rising raw material prices, especially gold, led to a surge in manufacturing costs, impacting overall profitability.
- Slow Recovery from the Pandemic: Though the market has been recovering, the lingering effects of the COVID-19 pandemic still affected consumer sentiment and spending habits.
- Intense Competition: The competitive landscape, particularly in the watch segment, has been tightening, with more brands offering budget-friendly options.
Despite the quarterly dip, Titan’s management remains optimistic about the future. They are focusing on the following strategies:
- Expanding Retail Footprint: The company plans to expand its retail network across Tier 2 and 3 cities.
- Investing in Technology: Emphasizing e-commerce and implementing AI-driven customer service are vital technological initiatives.
- Strengthening the Jewellery Segment: With the jewellery division outperforming other segments, more investment will be directed towards innovation and marketing.
Titan’s Q1 2023 results underscore the challenging market dynamics, with the jewellery business standing out as the key growth driver. Though the results missed estimates, the company’s focus on innovation, retail expansion, and digital transformation positions it well for potential growth in the coming quarters.
Investors and market watchers will likely closely monitor Titan’s strategies and execution in the next quarter to gauge whether the company can rebound from this temporary setback.
