Bengaluru: Titan Co Ltd’s net profit soared 70.86% as the watches business division recorded its highest-ever profit, even as the jewellery segment continued to be the major driving force behind the company’s overall growth rates.

Consolidated net profit at the company grew to Rs304.41 crore during the fourth quarter of 2017-18, up from Rs178.16 crore a year ago. Revenue grew 11.7% to Rs4,125.69 crore year-over-year.

“The Company achieved excellent top-line and bottom line growth in the jewellery and watches business. The jewellery business scaled new heights in terms of revenue growth and profitability. The business gained from tailwinds provided by regulatory developments like GST," Bhaskar Bhat, managing director of Titan, said in a statement filed with the BSE on Thursday.

Jewellery accounted for over 80% of Titan’s total revenue in 2017-18.

The implementation of the goods and services tax (GST) was expected to benefit organised jewellers in the long-run, even as some small jewellers in the unorganised market were forced to shut shop, unable to keep up with compliance costs and faced with a migration of customers to the organised space.

But Titan, in particular, gained another unexpected advantage this year. After the Mehul Choksi- Gitanjali Gems Ltd fraud was brought to light by state-run Punjab National Bank (PNB) in February, many jewellery companies lost their shine. Raising money also became a challenge for the industry as banks tightened scrutiny.

Titan – with its Tata Group backing - has since been listed by analysts as the jewellery company that stands to gain the most from the ensuing chaos in the sector, in the organised as well as the unorganised space.

Seemingly lending credibility to that prediction, profits at Titan’s jewellery segment jumped 60% to Rs424.68 crore during the January-March quarter. Revenue from the sales of jewellery, mainly sold under its Tanishq brand, grew 13.6% to Rs2,955.42 crore.

While jewellery has been doing much of the heavy lifting for Titan, this quarter the watches business also reported strong numbers. Although revenue at this division declined 2.5% on a consolidated basis, profits nearly tripled to Rs1,744 crore.

“The Watches business had a great year too with the recrafting strategy resulting in the highest top-line growth in recent years, a jump in margins and the highest ever profit," Bhat said in the statement.

For the watches segment, encouraging growth in modern large-format stores and e-commerce, the launch of new licensed brands and the success of the company’s Fastrack smart band, Reflex, were the drivers, the company said.

Titan’s overall consolidated revenue for 2017-18 grew 20.75% to Rs16,244.81 crore. Last month, the company had set itself a revenue target of Rs50,000 crore by 2022-23. It had 1,480 stores and over 1.9 million sq ft of retail space as of 31 March.

In a separate filing, Titan said Noel Tata - nominee of Tata Sons Limited - has been appointed as vice chairman of the board.

Titan also said Shilpa Prabhakar Satish, a nominee of Tamil Nadu Industrial Development Corporation Limited, has resigned from the board with effect from 10 May. B. Santhanam has been appointed as an independent director on the board, subject to the approval of shareholders, Titan added.

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