Titan Company has just released its financial results for the first quarter ending in June 2024. The results reveal a combination of both challenges and growth opportunities.
Despite facing some obstacles, this Tata group-owned firm continues to show resilience in its key sectors.
Titan’s key financial details for Q1 2024
Here are the details
| Metric | Q1 2024 | Q1 2023 | Change |
|---|---|---|---|
| Net Profit | Rs 715 crore | Rs 756 crore | -5.05% |
| Total Income | Rs 13,386 crore | Rs 12,011 crore | +11.44% |
| Total Expenses | Rs 12,413 crore | Rs 11,010 crore | +12.75% |
| Jewellery Revenue | Rs 11,808 crore | Rs 10,693 crore | +10.4% |
| Watches & Wearables Revenue | Rs 1,023 crore | Rs 914 crore | +12% |
| Eyewear Revenue | Rs 210 crore | Rs 203 crore | +3.44% |
| Other Segments Revenue | Rs 277 crore | Rs 138 crore | +100% |
| EBIT Margin | 9.7% | 10% | -0.3% |
| Raw Material Costs | +43% | – | – |
| Overall Sales Growth | Rs 12,223 crore | Rs 10,851 crore | +12.64% |
| Shares Performance YTD | -6% | – | – |
| Nifty 50 Index Performance YTD | +14% | – | – |
Profit Decline
Titan’s consolidated net profit for the quarter dropped by 5% to Rs 715 crore, down from Rs 756 crore in the same period last year. This decline was unexpected, as analysts had forecasted a profit of Rs 765 crore.
The primary reason for this shortfall was the rising gold prices, which affected demand in Titan’s core jewellery segment.
Jewellery Segment
Titan’s jewellery division, which includes well-known brands like Tanishq and CaratLane, saw a 10% increase in revenue, reaching Rs 11,808 crore. This growth was mainly due to higher selling prices, with the number of buyers increasing slightly.
Even with fewer wedding days, heightened competition, and severe heatwaves impacting demand, the segment remained robust. The Akshaya Tritiya festival significantly boosted sales, contributing to a 20% retail growth in the first six weeks of the quarter.
Titan continued its expansion efforts by opening new stores both domestically and internationally. Tanishq enhanced its global presence with a new store in Muscat, Oman, bringing its international total to 17 stores.
In India, Tanishq opened 11 new stores, Mia added 19, and Zoya introduced 3 new stores, including its first locations in Chennai and Pune.
Watches and Wearables
The watches and wearables segment, which accounts for 8% of total revenue, reported a 12% revenue increase to Rs 1,023 crore. The analog segment saw a robust 17% revenue growth, driven by brands like Titan, Fastrack, and Sonata.
Although the wearables segment experienced double-digit volume growth, declining average selling prices led to a 6% revenue drop compared to the previous year. Titan added 17 new stores in this segment, enhancing its market presence.
Eyewear
Titan’s eyewear segment posted a 3.44% revenue increase to Rs 210 crore. Revenue from other emerging businesses, including fragrances, wallets, and Indian dress wear (Taneria), doubled to Rs 277 crore.
Taneira’s sales grew by 4%, driven mainly by new store openings, while the fragrances and fashion accessories business saw modest growth.
Click here to read the latest news.
Conclusion
Titan’s first-quarter results showcase the company’s ability to navigate a challenging environment marked by rising gold prices and increased competition.
While the jewellery segment remains the cornerstone of its business, significant growth in the watches and wearables division, along with strategic store expansions, underscores Titan’s diverse growth strategy.
As Titan continues to innovate and expand, it remains a key player to watch in the Indian retail market.
People May Ask
Why did Titan’s profit decline in Q1 2024?
Titan’s profit decline was primarily due to higher gold prices, which reduced demand for jewellery.
How did Titan’s jewellery segment perform?
Despite challenges, Titan’s jewellery segment saw a 10% revenue increase, driven by higher selling prices.
What were the key growth areas for Titan?
The watches and wearables segment reported a 12% growth in revenue, and the eyewear segment saw a 3.44% increase. Emerging businesses like fragrances and Taneria also showed significant growth.
What factors impacted Titan’s overall sales growth?
Rising gold prices, fewer wedding days, increased competition, and heatwaves impacted overall consumer demand.
How did Titan expand its market presence in Q1 2024?
Titan opened new stores both domestically and internationally, including Tanishq’s expansion into Oman and new stores for Mia, Zoya, and its watches and wearables segment.
