Watches and accessories maker Titan Company Ltd on Wednesday secured 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 increased 19%. The company’s jewellery business recorded a decent 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 was 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.
With the factors in mind, the numbers actually came above expectations, jewellery continued to hold a strong show.
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, managing director said in a press release.
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 behind by ₹37 crore, said an analyst. He added that it could be largely reversed in the next quarter. He 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, shot 22% to ₹4,105 crore during the quarter while profit for the business stood at ₹499 crore in the March quarter. The watches segment grew modestly at 8% to ₹531 crore in FY19. Gross margins in watches were disappointing on account of weak sales and has been volatile.
However, the company has maintained its growth outlook for FY20 at 20%. 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.
