Titan may report marginal rise in Q1 net

Titan may report marginal rise in Q1 net
Comment E-mail Print Share
First Published: Fri, Jul 24 2009. 10 37 AM IST
Updated: Fri, Jul 24 2009. 10 37 AM IST
Mumbai: Watch and jewellery retailer Titan Industries Ltd will report a marginal growth in first-quarter profit on slow sales amid an economic slowdown, analysts said.
Profit may rise 2.42% to Rs330 million while revenues may increase 11.41% to Rs9.02 billion, a Reuters poll of brokerages showed.
“We expect low double-digit sales growth in the watch business,” brokerage Motilal Oswal said in a report, adding jewellery sales would grow between 10% and 20%.
Titan Industries has five watch brands, two jewellery retail chains -- Tanishq and Goldplus -- and an eyewear chain Titan Eye+. The company sells watches under its premium brand Titan and economy brand Sonata.
The modest sales growth will be driven by a strong increase in gold prices and stable growth in watches, brokerage Macquarie said in a report.
“We expect watch sales to be flat during the quarter and jewellery SBU (strategic business units) sales to grow just 8% y-o-y primarily driven by 20% rise in gold prices,” CLSA Asia Pacific Markets added.
However, the Bangalore-based retailer is likely to see a marginal dip in operating profit margins due to higher contributions from its jewellery segments, an analyst from a local brokerage told Reuters.
“Over 70% of Titan’s sales come from the jewellery segment which has lower margins compared to watches. This may put pressure on its bottomline,” the analyst said.
“It will be a muted quarter for them due to the slowdown in consumer spends,” he added.
“Improvement in consumer sentiment and stability in gold prices holds the key to volume growth in the coming quarters,” the report by Motilal Oswal said.
Titan is scheduled to report quarterly results on 27 July.
Comment E-mail Print Share
First Published: Fri, Jul 24 2009. 10 37 AM IST