Titan Company Limited has released its financial results for the third quarter (Q3) of the fiscal year 2024-25, ending December 31, 2024. Below is a detailed analysis:
1. Financial Performance
- Total Income: ₹17,723 crore, a 25% increase year-over-year (YoY).
- Net Profit: ₹1,047 crore, a slight decline of 0.6% YoY from ₹1,053 crore.
- Profit Before Tax (PBT): ₹1,396 crore, consistent with the previous year.
2. Segment-wise Performance
- Jewellery:
- Revenue: ₹14,697 crore, a 26% YoY growth
- Domestic Business Growth: 25% YoY.
- Key Brands: Tanishq and Mia.
- Highlights: Strong festive demand contributed to this growth.
- Watches and Wearables:
- Total Income: ₹1,128 crore, a 15% YoY increase.
- Analog Watches: 20% growth, with the Titan brand achieving an 18% increase.
- International Brands: 30% retail growth.
- Wearables Segment: Declined by 20%, with average selling prices and volumes decreasing by 8% and 7%, respectively.
- EBIT: ₹111 crore, with a margin of 9.8% for the quarter.
- Store Expansion: Added 23 stores (net) in Q3FY25, including 12 Titan World stores, 10 Helios stores, and 1 Fastrack store.
3. Margin Analysis
- Net Profit Margin: Decreased to 5.9% from 7.43% a year earlier, primarily due to selling gold at lower prices than purchased following India’s 2024 gold import duty cut.
- EBIT Margin: Declined by 177 basis points to 9.2%.
4. Impact of Gold Import Duty Reduction
- The reduction in customs duty on gold in July 2024 led to inventory losses, as Titan had previously purchased gold at higher prices. These losses were fully accounted for in this quarter, affecting profitability.
5. Market Outlook and Future Strategies
- Consumer Demand: Despite high gold prices, consumer demand remained strong during the festive season, indicating resilience in Titan’s target market.
- Inventory Management: The company has now absorbed the full impact of losses from the gold import tax cut, positioning it for improved margins in subsequent quarters.
- Expansion Plans: Continued focus on expanding retail presence across segments to drive future growth.
In summary, Titan Company demonstrated robust revenue growth in Q3 FY25, driven by strong performance in the jewellery segment. However, profitability was impacted by external factors such as the gold import duty reduction. The company remains optimistic about future prospects, supported by strong consumer demand and strategic initiatives.
