Titan Q4 Results: Revenue misses estimates

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Titan Q4 business updates

Titan announced its Q4 earnings for the FY22. Revenue misses the estimates having a decline in the net profit. Let's have a look at its earnings.

Revenue misses estimates: The revenue (excluding bullion sales) reported by the consumer discretionary company was lower by 2% YoY in Q4FY22. It stood at Rs 6,977 crore, lower than street estimates of Rs 7,290 crore. Partial lockdowns, volatility in the gold prices, and uncertain geopolitical conditions dented its performance in the fourth quarter.

Segment revenue

  • The Jewelry business registered a revenue of Rs 6,132 crore with a 4% decline compared to Rs 6,397 crore in Q4FY21. 
  • The Watches and Wearables business recorded a revenue of Rs 622 crore with 12% growth compared to Rs 555 crore in Q4FY21. 
  • The Eyewear business recorded a revenue of Rs 134 crore with 6% growth in Q4FY22 compared to Rs 127 crore in Q4FY21. 
  • Other businesses comprising Indian dress wear and Fragrances & Fashion accessories reported an income of Rs 42 crore in Q4FY22 compared to Rs 35 crore in Q4FY21, a growth of 20%. 

Fall in net profit: The net profit fell 7.2% YoY and stood at Rs 491 crore for the quarter ended March. It is well below the street estimate of Rs 618 crore. In the same quarter last year, it reported a net profit of Rs 529 crore.

Margins rise: The operating margins declined by 40 basis points YoY and 400 basis points QoQ to 10.7%. Operating profit fell 2% to Rs 782 crore against the estimate of Rs 884.5 crore.

EBIT Analysis for its Subsidiaries:

  • The Jewelry division achieved EBIT of Rs 780 crore for the quarter compared to Rs 703 crore in the year-ago period. 
  • The Watches and Wearables division reported an EBIT of Rs 16 crore compared to Rs 46 crore in the previous year. 
  • The eyewear division reported a loss of Rs 3 crore compared to EBIT of Rs 23 crore in the year-ago period.

Stores added: The company added a net of 269 stores during the year. Its retail chain (including Caratlane) had 2,178 stores across 337 towns with an area exceeding 2.8 million square feet as of March 2022.

Dividend: The company board has also recommended a dividend of Rs 7.5 per equity share.

Update from subsidiaries 

  • Titan Engineering & Automation Limited (TEAL) - It reported revenue of Rs 184 crore and a profit before tax of Rs 21 crore in Q4FY22 compared to revenue of Rs 102 crore and profit before tax of Rs 9 crore in Q4FY21. 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 Q4FY22, it clocked a revenue of Rs 365 crore and a profit before tax of Rs 11 crore compared to a revenue of Rs 253 crore and a profit before tax of Rs 10 crore in Q4FY21. 

Comments from CK Venkataraman, Managing Director, Titan Company.

  • "Despite frequent disruptions in the quarter owing to Covid wave 3 and other geopolitical factors, the quarter has been satisfactory in terms of growth and profitability," he said.
  • "The company is well prepared and looking forward to an exciting Ql with all its stores ramped up for a much-awaited Akshaya Tritiya festival this year. With international expansion in GCC markets and the first Tanishq store coming up in the US, we are gearing up to touch new horizons in FY23," he added.