Titan Company faces revenue drop of 7.6% in Q1, but contains decline in profit
While the sales income declined from Rs 3087.79 crore last year to Rs 2853.66 crore in Q1, profit after tax for the same period dropped by 2.9 per cent from Rs 182.48 crore last year to Rs 177.27 crore this year
As expected sales income for Titan Company in Q1 dropped by 7.6 per cent, largely on account of an unprecedented Q1 of 2013-14, which had witnessed a 47 per cent growth in jewellery business last year when gold price fell sharply.
While the sales income declined from Rs 3087.79 crore last year to Rs 2853.66 crore in Q1, profit after tax for the same period dropped by only 2.9 per cent from Rs 182.48 crore last year to Rs 177.27 crore this year. The company’s PBT stands at Rs 240.47 crore in Q1 as against Rs 251.53 crore during the same period last year, registering a drop of 4.4 per cent.
The watches business in Q1 this year recorded a healthy growth of 10.4 per cent. The income of watches business grew from Rs 398.68 crore to Rs 439.95 crore. The jewellery income in Q1 was Rs 2325.27 crore as against Rs 2586.61 crore, a decline of 10.1 per cent. The jewellery business continues to face regulatory pressures that have an adverse impact on sales. The company’s other businesses – eyewear, precision engineering and accessories grew by 3.8 per cent, from Rs 123.18 crore to Rs 127.63 crore this year.
The company has put together exciting plans to stimulate demand for all its product categories through innovative advertising campaigns and new product launches.
Retail expansion continued with a net addition of 22 stores across all its businesses in the first quarter, ending the period with a retail area of over 1.48 million sq ft nationally. The company’s retail chain is 1,100 stores strong as on June 30, 2014.
Bhaskar Bhat, Managing Director, Titan Company commented, “The consumer discretionary spend in the quarter was far more stable than what we witnessed in the past few quarters. With stability in the political environment, the market mood has been positive. However, due to an extraordinary first quarter witnessed by jewellery business last year, the topline growth in this quarter was tough. Regulatory pressures faced by the jewellery industry have amplified the challenge.”
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