Titan Q2 results preview: Revenue likely to see double-digit growth aided by jewellery business

Tata Group firm Titan Limited is scheduled to announce its financial results for the second quarter of the financial year 2024-25 on Tuesday, November 5.

Experts predict the consumer lifestyle company may report 12 to 16% year-on-year revenue growth in the September quarter, driven by the jewellery business.

Titan is expected to report consolidated revenue in the range of ₹13,100 to ₹13,500 crore in the July-September quarter of FY25, which reflects a 12 to 15.7% YoY growth rate and a sequential rise of around 8 to 12%. Meanwhile, its net profit will likely jump 8 to 10% YoY to ₹870 to ₹1,050 crore.

Investors will watch out for commentary on the demand scenario, the performance of its jewellery, watch, and wearables segments, and new store openings and their impact on margins. They will also be aware of the impact of the gold duty cut on sales.

Jewellery business expected to post healthy growth

Experts believe the Tata Group company will post healthy double-digit growth in the jewellery division after a muted first quarter. The government reduced the customs duty on gold imports from 15% to 6% in the Union Budget, which is expected to drive gold sales in the quarter.

Investors will also watch out for the performance of the company’s non-solitaire studded segment. According to the business update for Q2FY25, the company opened 24 stores in India and Abu Dhabi during the quarter—11 stores under the Tanishq brand, 12 Mia stores, and 1 Zoya store.

Titan had reported an estimated 25% jump in domestic operations during the second quarter of the current fiscal.

Watches & Wearables segment revenue growth to be under focus

Titan opened 34 stores in the Watches & Wearables segment during the September quarter. Investors will watch out for the impact of these stores on margins and revenue growth. The company reported an estimated 19% YoY rise in Watches & Wearables domestic business in the September quarter. The premiumisation theme continued to be a major driver across brands, the company informed the bourses.

EyeCare, Emerging Businesses to report steady growth

The company’s eyecare and emerging businesses are likely to maintain their growth in the second quarter as well. The EyeCare division's domestic business rose by an estimated 6% YoY in Q2, according to the business update. Its emerging businesses, which include Taneira and Fragrances and Fashion Accessories, reported high teen growth in the second quarter.

EBIT margins to remain under pressure

Experts believe that the company’s EBIT margins may remain under pressure due to the expansion in store count. The company opened 75 new stores in the second quarter. The company’s margins are expected to remain under pressure due to increased competitive intensity, which led to lower gold price premiums and rationalisation of making charges because of higher gold prices.

Titan Q1FY25 results

Titan reported an 8% YoY growth in standalone revenue in the first quarter to ₹12,053 crore. Its profit after tax (PAT) dropped nearly 1% YoY to ₹770 crore in the June quarter.

Total income of the jewellery business for the quarter grew by 9% YoY to ₹9,879 crore. EBIT was at ₹1,103 crores, while the margin was 11.2% for the quarter.

Watches & Wearables business recorded a total income of ₹1,021 crores, up 15% YoY. EBIT came in at ₹115 crore while EBIT margin was 11.3%.

Titan shares trade in a range

Shares of Titan Company Ltd traded higher ahead of its financial results. Shares are trading 0.6% higher at ₹3,241 apiece on the NSE at 10:00 am. Titan shares have declined more than 13% in year-to-date and 0.21% in the last one year. The stock has dropped more than 11% in the last one month.