Titan Q3 results update
Last updated: 10 Feb, 2021 | 02:43 pm
Earnings impacted by one-time loss: Titan has reported a net profit of Rs 419 crore in Q3FY21, a drop of 11% as compared to the same period previous fiscal. Analysts had earlier estimated the profit at about Rs 535 crore. During the quarter, the company took a one-time loss of Rs 137 crore on account of scaling down of its subsidiary Favre Leuba.
Revenues rise: Titan has reported a 17% on-year rise in revenue to Rs 7,287 crore. This is in-line with street estimates of Rs 7,250 crore. Jewellery segment, which accounts for 89% of the overall sales, saw a 22% on-year rise in sales to Rs 6,589 crore. The table below shows Titan's revenue from various segments. Other segments are yet to recover to pre-Covid levels.
Margins remain flat: Titan has reported an EBIT margin of 10.8%. EBIT margin was impacted by the lower studded mix and higher coin sales, which was partially recouped by reduction in fixed expenses. The jewellery division's operating profit in the quarter stood at Rs 752 crore as against Rs 701 crore in the year-ago quarter.
Titan has reported a good set of numbers in Oct-Dec 20 period. The bottomline has been impacted due to one-off items. Recovery in the Jewellery segment in encouraging. The quarter also witnessed a well-rounded recovery with improvement in walk-ins and pick up of sale in metros, sub 1-lakh category. More importantly, Titan said that there was significant recovery in diamond studded jewellery suggesting that recovery in demand due to the festive season and weddings.
While the customer sentiment has improved over the quarters, there was greater willingness to spend on plain gold jewellery and gold coins rather than discretionary items, explaining the reason why Watches and Eyewear are taking longer to achieve full recovery. The business has been impacted due to a sharp drop in discretionary spending as well as the lockdown imposed to contain the pandemic. While the recovery in sales in various segments is encouraging, all segments reaching growth phase could take a few months.