Titan net drops 9.96 percent, due to operating cost pressures

One of the consumer beacons of the Tata group, Titan Company, reported a 9.96% drop in consolidated net profit for Q3FY23 quarter. The net profit at Rs 904 crore in Q3FY23 was sharply lower than Rs 1,004 crore recorded in Q3FY22 in the previous year. Top line revenues overall came in at Rs 11,698 crore for Q3FY23, a growth of 15.89% on a yoy basis, clearly implying that the cost pressure of inputs and operations took a toll on the profits. 

This is also lower than the Rs 985 crore of net profits that the street had estimated, so the impact on the price is normally felt on the downside. However, revenues were better than the street estimates for Titan. The India business of Titan grew 9% on the back of robust consumer demand during the festive season. There was a lot of preference from customers for distinct and differentiated designs as customers get more choosy.

For the December 2022 quarter, the earnings before interest and taxes (EBIT) stood at Rs 1,236 crore while the EBIT margins stood at 13%. During the quarter, their principal jewellery retail brand, Tanishq, also opened its first boutique store in New Jersey in the US. Titan added 22 stores during the quarter taking the total Jewellery store count to 510 spread across 247 cities. With the New Jersey addition, Titan has 6 outlets abroad.

Apart from the jewellery segment, the watches & wearables segment saw total income grow 15% at Rs 811 crore. The segment reported EBIT margins of 11% for the quarter. The third business vertical of Eye Care saw total income rise by 12% yoy to Rs 174 crore in Q3FY23 yoy, while the EBIT margin stood at an impressive 18.4%. Even the eye care business undertook an expansion into Dubai in the quarter and added 36 domestic stores. Its total store count stands at 863 outlets spread across 354 cities.