Titan Company on Friday after market hours reported lower-than-expected results for the fourth quarter ended March 2016. The company reported a fall of 14.4 per cent in net profit at Rs 184.11 crore for the quarter under review as compared to Rs 215.09 crore for the same quarter in the previous year.
Net sales decreased 1.51 per cent at Rs 2,437.15 crore for quarter under review as compared to Rs 2,474.43 crore for the quarter ended March 31, 2015.
Reacting on corporate results, shares of Titan Company slid as much as 3.31 per cent intraday on Monday. However, the share price of the company closed 0.41 per cent up at Rs 365.60.
According to Reliance Securities, Titan Company has reported lower-than-estimated results in 4QFY16 on all operational parameters. Poor quarterly performance can be attributed to multiple factors such as jewellers strike in March following levy of excise, advancing watch discounts to the previous quarter and one-off impact of Rs 21 crore in watches business arising from VRS in a subsidiary and consolidation of large format stores.
For the year ended March 2016, Titan has posted a fall of 14.24 per cent in its net profit at Rs 705.85 crore as compared to Rs 823.07 crore for the same period in the previous year.
On the consolidated basis, the company has posted a fall of 15.54 per cent in its net profit after taxes and share of profit of associates at Rs 689.39 crore for the year ended March 2016. It reported net profit of Rs 816.26 crore in 2015-16.
Consolidated net sales of the company decreased by 5.18 per cent at Rs 11,189.79 crore for year under review as compared to Rs 11,800.99 crore for the period ended March 31, 2015.
Post Q4 results, Reliance Securities revised its recommendation for Titan Company stocks from ‘Buy’ to ‘Accumulate’ with revised target price of Rs 372.
Religare Institutional Research in note said, “Titan’s Q4FY16 results were below estimates on all counts amid a weak macro, new regulatory controls for the jewellery business, preponement of activations in Q3FY16 and one-offs in the watches business. The brokerage house maintained ‘Hold’ rating on Titan with March 2017 target price of Rs 360.”