Titan Q3 Results: 136% on year rise in Net Profit, beats estimates

Revenue beats estimates - The revenue reported by consumer discretionary company was 30.6% higher YoY in Q3FY22. It stood at Rs 9,515 crore, higher than street estimates of Rs 9,337 crore. The rise in revenue was driven by festive purchases in October and November. 

Segment revenue - The Jewellery business registered a revenue of Rs 8,563 crore with 37% growth compared to Rs 6,249 crore in Q3 FY21. The Watches and Wearables business recorded a revenue of Rs 708 crore with 29% growth compared to Rs 550 crore in Q3FY21. The Eyewear business recorded a revenue of Rs 156 crore with 26% growth in Q3FY22 compared to Rs 124 crore in Q3FY21. 

Increase in net profit - The net profit increased 135.6% YoY and stood at Rs 987 for the quarter ended December. It is well above the street estimate of Rs 847 crore. In the same quarter last year, it reported a net profit of Rs 419 crore.

Margins rise - The operating margins increased by 290 basis points YoY to 14.7%. The Jewellery division achieved EBIT of Rs 1,260 crore for the quarter compared to Rs 752 crore in the year-ago period. The Watches and Wearables division reported an EBIT of Rs 82 crore compared to Rs 57 crore in the previous year. Eyewear division reported an EBIT of Rs 34 crore compared to Rs 22 crore in the year-ago period.

Operating margins increase - Update from subsidiaries 

• Titan Engineering & Automation Limited (TEAL) - It reported revenue of Rs 79 crore and a profit before tax of Rs 5 crore in Q3FY22 compared to revenue of Rs 87 crore and profit before tax of Rs 6 crore in Q3FY21. The automation solutions business is showing encouraging signs with new orders coming in from different industry verticals. 
• CaratLane Trading Private Limited - The company continued to do well in both online and offline channels emerging as a strong omni player. For Q3FY22, it clocked a revenue of Rs 446 crore and a profit before tax of Rs 28 crore compared to revenue of Rs 273 crore and a profit before tax of Rs 16 crore in Q3FY21. 

Review

Titan Company has reported an excellent set of numbers for the December quarter. It has beat analysts' estimates in both topline and bottomline. The festive purchases in the quarter have driven Titan's strong growth in all businesses of the company and the quarter has turned out to be one of the best quarters in terms of growth and profitability. Even though Covid has slowed down the growth momentum, the company is certain on closing the year on a positive note.

The share of Titan closed at Rs 2,464 on Thursday afternoon.