Titan Company slides as Q1 PAT slips marginally to Rs 770 cr

Revenue from operations jumped 9.92% year on year (YoY) to Rs 11,105 crore in the quarter ended 30 June 2024.

Total income (excluding bullion sale) for the quarter stood at Rs 11,263 crore, registering a growth of 9.3% on YoY basis.

Profit before tax fell marginally to Rs 1,021 crore in June 2024 quarter from Rs 1,024 crore recorded in corresponding quarter last year.

EBITDA jumped 10.6% to Rs 1,329 crore in Q1 FY25 as against Rs 1,202 crore posted in Q1 FY24. EBITDA margin rose by 14 bps to 11.8% in the quarter ended 30 June 2024.

EBIT stood at Rs 1,203 crore, up 9.1% YoY while EBIT margin shed by 2 bps to 10.7% posted in Q1 FY24.

During the quarter, the company's income from jewellery business grew 9% YoY to Rs 9,879 crore in Q1 FY24. The India business grew 8% in the same period. EBIT was at Rs 1,103 crore with a margin of 11.2% for the quarter.

Tanishq expanded its international presence adding a new store in Muscat, Oman taking Titan's Jewellery international footprint to 17 stores. During the quarter, in India, Tanishq opened 11 new stores (net), Mia added 19 and Zoya added 3 stores respectively.

Watches & wearables business recorded a total income of Rs 1,021 crore, up 15% compared with Q1 FY24. The domestic business grew 14% in the same period. EBIT came in at Rs 115 crore clocking a margin of 11.3% for the quarter.

While volumes in Wearables segment clocked healthy double-digit growths, the average selling prices continued to decline leading to a 6% drop in revenue compared to Q1 FY24. During the quarter, a total of 17 new stores (net) were added across the network comprising of 5 new stores in Titan World, 5 in Helios and 7 in Fastrack respectively.

EyeCare business recorded total income of Rs 209 crore in Q1 FY25 grew 3% over Q1 FY24. Business recorded an EBIT of 20 crore clocking a margin of 9.6% for the quarter. Titan Eye+'s affordable fashion products range drove 10% volume growth for the Division compared to Q1FY24. Volumes from both House Brands and Others grew 10% and 13% respectively over Q1FY24. The revenue growth via Titan Eye+ retail channel came in at 10% in the same period.

The Emerging Businesses comprising of Indian dress wear (Taneira), Fragrances, Fashion Accessories (F&FA) recorded a total income of Rs 80 crore for Q1 FY25 growing 5% compared to Q1 FY24. The Businesses together recorded a loss of Rs 26 crore for Q1 FY25. Taneira's sales grew 4% compared to Q1 FY24 mainly driven by growth from new stores. The F&FA business grew 1% compared to Q1 FY24.

Among subsidiaries, Caratlane Tradings total income grew 30% to Rs 832 crore as compared to Q1 FY24. EBIT came in at Rs 38 crore for Q1 FY25 clocking a margin of 5.1%. Caratlane added 3 new stores in the quarter taking the total store count to 275 stores spread across 112 cities pan-India.

Titan engineering & automation (TEAL) recorded a total income of Rs 197 crore in Q1 FY25, a growth of 223% compared to Q1 FY24. EBIT for the quarter was at Rs 11 crore at a margin of 5.8%. The Automation Solutions (AS) business grew grew 12 times (on a low revenue base of Q1 FY24) and the manufacturing services recorded a growth of 55% over Q1 FY24. The AS business ended the quarter with a closing order book of more than 450 crore.

C K Venkataraman, MD, Titan Company, 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. Notwithstanding some of these near-term variations, Titan is steadfastly pursuing market share gains across all business categories and is well equipped to provide a differentiated retail experience to our valued customers. We remain optimistic about our performance for rest of the financial year.”

Titan Company, a joint venture between the Tata Group and the Tamilnadu Industrial Development Corporation (TIDCO), commenced its operations in 1987 under the name Titan Watches. In 1994, Titan diversified into Jewellery (Tanishq) and subsequently into EyeCare.