Titan Company Ltd., a leading jeweller and watchmaker, reported a 5.4% drop in consolidated net profit for the April-June quarter on Friday. The company’s net profit fell to Rs 715 crore, down from Rs 756 crore a year earlier.
Despite the profit decline, Titan saw a 12.6% increase in sales, reaching Rs 12,223 crore for the quarter, compared to Rs 10,851 crore in the same period last year. Total income for the quarter rose by 11.4% to Rs 13,386 crore.
The company’s total expenses increased by 12.75% to Rs 12,413 crore. Titan’s jewellery business revenue grew by 10.4% to Rs 11,808 crore. The jewellery segment experienced a 20% retail growth in the first six weeks of the quarter, which included the Akshaya Tritiya festival.
However, Titan faced several challenges during the quarter, including a significant rise in gold prices (20% increase), election-related restrictions, a limited number of wedding dates, and an unprecedented heat wave affecting consumer demand.
Titan expanded its international presence with a new store in Muscat, Oman, bringing its total international jewellery stores to 17. In India, Tanishq opened 11 new stores, Mia added 19, and Zoya opened 3 new stores, including its first locations in Chennai and Pune.
Revenue from the Watches & Wearables segment increased by 12% to Rs 1,023 crore, driven by strong growth in the analog segment. However, revenue from the Wearables segment declined by 6% due to falling average selling prices.
The Eyecare segment saw a 3.4% revenue increase to Rs 210 crore. Revenue from other segments, including fragrances and Indian dress wear (Taneira), grew twofold to Rs 277 crore. Taneira’s sales rose by 4%, mainly due to new store openings.
Titan, a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO), saw its shares fall by 0.15% to Rs 3,463.15 on the BSE on Thursday.
On the Q1 results, Titan CEO CK Venkataraman said, “In the recently presented Union Budget, the custom duty on gold imports in the country has been reduced from 15% to 6%. This development has long term positive implications for the Jewellery industry. While this change is likely to entail a short-term impact in the form of value loss on duty paid gold inventory (expected to be expensed over the next two quarters), we remain optimistic on the longer-term benefits as it makes the market equitable for large businesses like ours.
“Our first quarter performance reflects mixed consumer trends in lifestyle categories. While the inclement weather conditions during the summers, general elections and lower wedding days impacted retail walk-ins, the growth metrics in Watches & Wearables and EyeCare were quite healthy,” he added.