Titan shares plunge over 4% as net profit dips amid mixed Q1 results

Titan Ltd shares plunged 4.21% in the opening trade on Monday, August 5, 2024, diving to ₹3,316.5 per piece on the National Stock Exchange (NSE) at 9:15 am, as markets reacted to the company’s mixed set of numbers for the quarter ended June 30, 2024, release post market hours on Friday.

The jewellery-to-watches manufacturer’s consolidated profit after tax (PAT) declined 5.5% year-on-year (YoY) to ₹715 crore in the first quarter of the current financial year from ₹756 crore in the same period last year.

Titan's total income on a consolidated level increased 12% YoY to ₹12386 crore in the June 2024 quarter, led by a 9% YoY rise in the company’s Jewellery business. Titan’s total income in the June 2023 quarter stood at ₹11,070 crore.

The heavyweight company’s Jewellery business reported a 9% YoY growth in the April to June 2024 period to ₹9,879 crore. A 20% retail growth was witnessed in the first six weeks of the quarter alone, which included Akshaya Tritiya. Factors including a steep jump in the rates of gold, restrictions due to elections in many markets, few wedding dates, and an unprecedented heat wave across the country impacted overall consumer demand.

Titan’s overall consolidated Earnings Before Interest and taxes (EBIT) climbed 8.3% year-on-year in Q1 FY25 to ₹1,203 crore from ₹1,111 in the same period last year, while the EBIT margin contracted 32 basis points (bps) to 9.7% from 10% in the year-ago period.

Its profit before tax (PBT) dipped 3% YoY to ₹973 crore in the quarter under review from ₹1,002 crore last year due to financial costs of Caratlane acquisition, which were not a part of the base quarter. The subsidiary’s (CaratLane) total income jumped 30% YoY to ₹832 crore in Q1 FY25, while adding a net of 3 new stores in India during the period.

The company’s international jewellery business recorded a stellar growth of 92% YoY to ₹350 crore in Q1 FY25. In the last one year, Titan opened a total of 8 new Tanishq stores across multiple locations globally, including 4 stores in the GCC region, 3 in North America and 1 in Singapore. In the June 2024 quarter alone, a new Tanishq store was opened in Muscat, Oman.

“Our first quarter performance reflects mixed consumer trends in lifestyle categories. While the inclement weather conditions during the summers, general elections and lower wedding days impacted retail walk-ins, the growth metrics in Watches & Wearables and EyeCare were quite healthy,” said the Managing Director of Titan, CK Venkataraman.

Shares of the mega-cap company traded 1.3% lower at ₹3,421 per piece on the NSE at 9:42 am on Monday.