Bengaluru: Watches and accessories maker Titan Co. Ltd on Tuesday reported a 13.08% rise in net profit to Rs255.75 crore in the December quarter on strong festive and wedding season sales. Revenue rose 14.38% to Rs3,925.95 crore during the period.
Both net profit and revenue beat estimates of Rs244.20 crore and Rs3,675.10 crore, respectively, in a Bloomberg analysts’ survey.
Sales of watches, jewellery, eye-wear and other businesses, including precision engineering and accessories, rose from a year ago.
Revenue from Titan’s jewellery business, run mainly under the Tanishq brand, grew 15.41% from a year ago to Rs3,255.00 crore. Sales from this segment typically accounts for a major portion of overall revenue. Its watches segment revenue grew 5.05% to Rs508.26 crore.
“Despite initial headwinds on account of demonetization, the company clocked a growth of over 14% and a PBT (profit before tax) growth of 21%. The festival season was very good for both our jewellery and watches business. Our effort continues, therefore, to be one of generating demand, through new product introductions and network expansion, while retaining our focus on cost control,” managing director Bhaskar Bhat said.
Early last month, Titan had warned in a stock exchange filing that the third quarter that had kicked off on a high note due to the festive season, was dented somewhat by demonetization. Titan also said sales had recovered in the modern and dedicated retail channels and that the only cause for worry was sales of watches through trade or multi-brand retail outlet channels.
The company has since repeatedly said it expects demonetization to give its jewellery business a boost as customers migrate from the large informal space, which most consumers traditionally tap for their jewellery purchase, to the organized segment of the market.
Titan’s shares closed up 0.52% at Rs393.4 a share on BSE on Tuesday.
The company started the process of merging its Gold Plus brand with the larger Tanishq during the quarter and estimates that the merger will be completed in 5-6 months. It launched the Favre-Leuba watch brand in a few stores in India and is planning to launch it in Taiwan. Favre-Leuba watches are currently sold in India, UAE and Japan.
“Jewellery has been exceptionally good with 20% top line and 15% same-store growth. After a long time we are seeing 15% same-store growth and it was aided by a lot of work we’ve done in the jewellery business, especially on new consumer launches and consumer schemes. Studded (jewellery) ratio was lower. Coin sales have grown by 40%,” Bhat said on a call with analysts.
“Our online brand CaratLane has had a good quarter, after two not-so-good quarters, despite demonetisation. Watch division after a long time has shown retail growth after long. It is the trade (channel) where the effect of demonetization was more severe. The launch of the Sonata ACT watch, a smartwatch basically for women’s safety has been received very well and has brought excitement back into the trade,” Bhat added.
Company executives said they have withdrawn helmets under its Fastrack youth accessories brand. Titan had launched Fastrack helmets in 2013.