Titan sees better-than-expected 13x jump in profits as jewelery business shines

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By CNBCTV18.com ist (published)


Titan results: Analysts polled by CNBC-TV18 expect the Tata group’s watches, jewelery and eyewear makers to report a 12-fold jump in net profit for the quarter ended June 2022.

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Titan, the Tata group maker of watches, jewelery and eyewear, on Friday reported a 13-fold jump in quarterly net profit, beating Street estimates, amid festive demand to boost its jewelery business and stability in gold rates. Cause happened. Titan’s stock — whose brands include Tanishq, Caratlane, Fastrack and Titan iPlus — built on gains the day after the earnings announcement.

After the results, Titan’s stock rose two per cent to Rs 2,471.7 on the BSE.

The Management of the Company expressed confidence that the outlook for the rest of the year ending March 2023 looks positive.

Titan posted a net profit of Rs 793 crore in the April-June period, as against a lower base of Rs 61 crore for the same period a year ago. According to a regulatory filing, its revenue for the three-month period nearly tripled to Rs 8,961 crore from Rs 3,249 crore in the year-ago quarter.

analyst in CNBC-TV18 Poll Titan’s net profit was estimated at Rs 740 crore and revenue at Rs 8,700 crore.

“Financial year has started well for us and we have delivered a strong performance in the first quarter (April-June) across all our business segments. Despite a challenging macro environment, the outlook for the remaining quarters looks positive and we are looking to improve our investments. The plans continue to be executed in India as well as in selected international geographies,” said CK Venkataraman, Managing Director, Titan.

The jewelery maker’s EBITDA margin – a key measure of operating profitability – rose 860 basis points to 13 per cent, against analysts’ estimate of 12.4 per cent.

Titan’s improvement in margins is one of the best among blue-chip companies in the current earnings season, and it comes at a time when high inflation is affecting margins of businesses across sectors.

Revenue from the jewelery business nearly tripled to Rs 7,956 crore for the three-month period from Rs 2,891 crore for the quarter ended June 2021. The entity’s EBIT margin – a measure of a business’s operating efficiency – improved by 570 basis points. 12.9 percent from the year.

According to the company’s quarterly update last month, sales in Titan’s jewelery business doubled in April-June as the base was lower in the year-ago period.

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