Titan shatters market estimates as Q2 profit soars 270%
Titan Company Ltd on Wednesday reported a steep 270% jump in consolidated net profit for the second quarter, as demand for its key products from eyewear to watches and jewellery strongly recovered.
The Tata Group company said it posted a net profit of Rs 641 crore for the July-September period from Rs 173 crore a year earlier. That exceeded analysts’ forecasts of a profit between Rs 530-580 crore.
Net profit for the second quarter was also far greater than the Rs 20 crore it earned in the first quarter (April-June) when India was hammered by a devastating second wave of the Covid-19 pandemic.
Indeed, demand postponement triggered by the second wave in avenues like gift purchases, weddings, and investments in gold recorded a strong comeback in the quarter through September.
The maker of Fastrack watches and Tanishq jewellery said its revenue from operations soared 75% to Rs 7,243 crore for the second quarter from Rs 4,127 crore in the corresponding period last year. Growth was led by the jewellery division, which accounts for more than four-fifths of its total revenue.
Ahead of the results announcement, shares of Titan closed flat at Rs 2,460.35 apiece on the BSE. The shares have fallen 8% since touching a high of Rs 2,678 apiece on October 18 but have still more than doubled from the one-year low in November last year.
Titan Q2: Other highlights
1) Jewellery division recorded revenue of Rs 6,106 crore for Q2, up 77% versus Rs 3,446 crore a year earlier.
2) Jewellery division clocked earnings before interest and tax of Rs 793 crore for Q2 versus Rs 285 crore.
3) The watches and wearables business recorded sales of Rs 687 crore, up 72% from Rs 400 crore earlier.
4) Eyewear business generated income of Rs 160 crore, compared with Rs 94 crore in the same period last year.
5) The watches and wearables business recorded EBIT of Rs 92 crore versus a loss of Rs 4 crore a year earlier.
6) Eyewear business registered EBIT of Rs 37 crore versus Rs 9 crore a year earlier.
Titan management commentary
CK Venkataraman, managing director at Titan, said the strong growth this quarter was underpinned by demand recovery being witnessed in all segments of the company.
He also said that the stores were fully operational, returning to pre-pandemic normalcy in most parts of the country with continued focus on health and safety of our customers, business partners and employees.
Venkataraman also said that Titan’s store expansions gained traction during the quarter, which was partially disrupted in the pandemic period. “Our strong digital presence combined with trusted offline experience gives a positive outlook for the overall performance of the Company for the rest of the fiscal year,” he added.
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