NEW DELHI: Watches and accessories maker Titan Company Ltd on Wednesday reported a 14.4% jump in its consolidated net profit for the quarter ended March 31, while revenue at the maker of Titan watches and Tanishq jewellery was up over 19%. The company's jewellery business recorded a strong performance for the quarter, while its profit after tax came below estimates on account of one-offs during the quarter.

Consolidated net profit for the fourth quarter of FY19 stood at 348.3 crore from 304 crore in the same quarter last year, while total revenue stood at 4,945 crore up from 4,125 crore on a year ago basis.

During the quarter, the company made provisions to the tune of 46 crore for investments made as part of treasury operations in inter-corporate deposits in the IL&FS Group.

"Keeping all the factors in mind, the numbers actually came above expectations, jewellery continued to hold a strong show," said an analyst on the condition of anonymity.

For the full year, consolidated income stood at 19,779 crore, while consolidated net profit was 1,389 crore.

During the year, the company witnessed a net addition of 115 stores.

“The growth momentum of the past few years continued in 2018-19 backed by the strong revenue as well as profit growth across all key divisions," Bhaskar Bhat, managing director said in a press release.

The company also made provisions of 70 crore for impairment of investment in its Swiss subsidiary (Favre Leuba AG, Switzerland) in FY19. “Titan had three one offs in the quarter of which one will reverse in coming quarter. Gold valuation at year end took a hit due to lower gold prices in the latter half of the quarter resulting in margins being depressed by 37 crore," saidAbneesh Roy, analyst at Mumbai-based brokerage firm Edelweiss Securities. “This is expected to be largely reversed in the next quarter," he added. Roy said the results were in line with expectations.

Segmental performance at Titan was mixed with its jewellery business holding a strong double digit growth.

The company's jewellery business, grew 22% to 4,105 crore during the quarter while profit for the business stood at 499 crore. While the watches segment grew modestly at 8% to 531 crore. "Gross margins in watches were disappointing on account of weak sales and has been volatile," said Roy

However, the company has maintained its growth outlook for FY20 at 20%. In fact, in a post-earnings call, the company's management said that it was already seeing a strong demand in the year-to-date period (i.e. April 1 2019 onwards) where it has witnessed a 19% growth in jewellery business.

"We continue to remain positive on Titan due to its ability to keep getting market share in jewellery, strong guidance of 20% growth (an outlier in FY20 consumption, and seeding future growth drivers like Sarees, smart wearables etc",Roy at Edelweiss said.


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