Titan Q2 net profit jumps 67% at Rs278 crore
Bengaluru: Watches and accessories firm Titan Co. Ltd reported a 67.44% jump in its September quarter profit versus the same period a year ago on strong sales in its jewellery business.
Consolidated net profit rose to Rs277.93 crore in the three months to September from Rs165.98 crore a year ago, the company said in a BSE filing on Friday. Total revenue increased 29.56% to Rs3,517.70 crore from Rs2,714.98 crore a year ago.
Sales at its jewellery business segment, retailed mainly under the Tanishq brand name, were up 36.9% at Rs2,748.2 crore in the quarter.
“Our jewellery business was impacted by the new PMLA regulations at the beginning of the quarter but the roll back, just before the festive season, provided a boost to the business,” Titan’s managing director Bhaskar Bhat said in a statement.
On 23 August, the government issued a notification under the Prevention of Money Laundering Act (PMLA) that any sale of gold above Rs50,000 required customers to furnish their PAN (permanent account number) or Aadhaar details to the jeweller. On 6 October, the government rolled back this notification. There’s no need to furnish such details now.
The implementation of the goods and services tax (GST) had also initially hit Titan’s jewellery business. Although there was a brief slowdown in the jewellery business in the first half of July, as customers made their purchases in June instead, growth in this business was expected to be fairly good for the quarter, the firm had said in a Q2 update published on 28 September.
Under its flagship jewellery brand Tanishq, Titan launched two key collections in the period—Jewels of Royalty and Padmavati. The company has just launched the latter, in association with an upcoming Bollywood movie of the same name, and expects it to do well. Jewels of Royalty is a collection of high-value studded diamond jewellery aimed at the wedding segment, in line with Titan’s wider strategy of increasing its market share in India’s massive wedding jewellery market.
The company has also been working on other initiatives targeted at increasing jewellery sales in the wedding segment by creating special design lines for its Rivaah sub-brand and special wedding zones within its retail stores. It launched Rivaah in March and has now taken the sub-brand to all Tanishq stores.
“The watches business also witnessed growth across most channels with the festive season buildup appearing very encouraging. However, the slowdown in international markets continued,” Bhat said on Friday.
Revenue from Titan’s watches segment grew 8.96% annually while eyewear sales rose 3.51%.
Titan gained 0.56% to close at Rs 659.40 per share on Friday on the BSE, while the benchmark Sensex gained 0.33% to close at 33685.56 points.