While Titan has been on a recovery path after coronavirus lockdown and has opened 1400 of its over 1800 stores, normalcy in sales is expected only by the end of the current fiscal.
While Titan has been on a recovery path after coronavirus lockdown and has opened 1400 of its over 1800 stores, normalcy in sales is expected only by the end of the current fiscal. The jewellery and watches maker has reported around 60% sales in May 2020 of the pre-covid times, and has said that better is expected in June. Even then, the full impact of lockdown is likely to be reversed only by Q4FY21, the company management said in an investors’ concall after declaring January-March quarter financial results. The company also said that the “good performance” of preceding two months before the lockdown was also “negated” due to the pandemic.
Even then, Titan has recorded an improved operating profit. While the quarter was otherwise weak due to lockdown, three factors played out in boosting Titan’s operating profits — Improved gross margins, lower ad spends and cost saving measures. Titan has reported quarterly opening profit at over Rs 604 crore and a growth of 21.11 per cent in net profit at Rs 356.79 crore for the quarter ended March 31. The company has also cut costs on advertisement by about 32.5 per cent during the quarter. The company will focus on cost-cutting measures, the management said during the earnings call.
“Jewellery business had a good quarter till the lockdown despite high gold prices. However, the lockdown resulted in the division recording an income of Rs 3,754 crore for the fourth quarter as compared to Rs 3,986 crore last year, a decline of 5.8%,” the company announced. Buyers are also deterred by the fact that gold prices over the last 12 months have only shot up. Meanwhile, Titan’s eyewear business offered no respite either and continued to struggle. However, Titan’s management remains bullish on the growth in jewellery, watches and eyewear on the back of strong customer outreach programs and the overarching trust of Titan and Tata brand.