Titan Company Q1 Results: Net profit drops marginally to ₹770 crore, revenue up 9% YoY

Titan Company Q1 Results: Titan Company announced its April-June quarter results for fiscal 2024-25 (Q1FY25) on Friday, August 2, reporting a marginal drop of around one per cent in standalone net profit at ₹770 crore, compared to ₹770 crore in the corresponding period last year.

The Tata Group company's revenue from operations in the first quarter of the current fiscal rose nearly nine per cent to ₹11,263 crore, compared to ₹10,306 crore in the year-ago period. The drop in net profit was because higher gold prices hindered demand in its mainstay jewellery segment.

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Titan Company Q1 Results: Key Metrics

On the operational front, Titan Company's earnings before interest, taxes, depreciation, and amortization (EBITDA) during the June quarter rose 9.8 per cent to ₹1,211 crore, compared to ₹1,103 crore in the year-ago period. Margin rose by 20 basis points (bps) to 10.1 per cent compared to 9.9 per cent in the same period last year.

The Tata group stock boasts investments from the insurance giant Life Insurance Corporation (LIC) of India and renowned Indian investor Rekha Jhunjhunwala, wife of late ace investor Rakesh Jhunjhunwala. LIC owns 1.78 percent of the total paid-up capital of the Tata group company. Jhunjhunwala holds a substantial 4,74,83,470 of Titan shares.

Gold prices have been on the rise since the last financial year, dampening demand for jewellery in India, the world's second-largest gold consumer, with many retailers offering significant discounts to attract customers. Fewer wedding days during the quarter, increasing competition from regional players, and heatwaves across the country have also stifled demand for gold jewellery.

Titan's jewellery business, which houses brands like Tanishq and CaratLane and accounts for 88 per cent of overall revenue, reported a 10 per cent rise in revenue. The company said domestic growth for jewellery was largely due to higher selling prices, whereas buyer growth was in the low single-digit percentage range. Titan's watches and wearables segment, which contributes eight per cent to the total revenue, reported a 12 per cent growth in revenue. 

Also Read: Titan anticipates stronger gold jewellery demand in H2FY25

During the June quarter, a total of 17 new stores (net) were added across the network comprising of five new stores in Titan World, five in Helios and seven in Fastrack respectively. 'Runway', Titan's first exclusive store offering premium sunglasses for the discerning customers, was launched in June at Bengaluru. Including this store addition, three new Titan Eye+ stores (net) were opened in Q1FY25.

CaratLane added three new stores (net) in the quarter taking the total store count to 275 stores spread across 112 cities pan-India. Titan is known for transforming India's watch and jewellery industry and shaping the country's retail market by pioneering experiential retail.

"In the Union Budget, the custom duty on gold imports in the country has been reduced from 15 per cent to six per cent. This development has long term positive implications for the Jewellery industry. While this change is likely to entail a short-term impact in the form of value loss on duty paid gold inventory (expected to be expensed over the next two quarters), we remain optimistic on the longer-term benefits as it makes the market equitable for large businesses like ours,'' said CK Venkataraman, Managing Director, Titan Company.

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‘’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. Notwithstanding some of these nearterm variations, Titan is steadfastly pursuing market share gains across all business categories,'' added Venkataraman.

Ahead of the announcement of Q1FY25 results, shares of Titan Company settled 0.15 per cent lower at ₹3,463.15 against a 52-week high of ₹3,85 apiece on the BSE. Titan Company's shares are down nearly six per cent so far this year, compared to a 14 per cent gain in the benchmark Nifty 50 index.