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Titan slides as Q3 PAT decline 5% YoY to Rs 990 cr

05-Feb-25 10:43 Hrs IST

However, revenue from operations jumped 24.32% year on year (YoY) to Rs 16,053 crore in the quarter ended 31 December 2024.

Total income (excluding bullion sale) for the quarter stood at Rs 13,071 crore, registering a growth of 24.2% on YoY basis.

Profit before tax in the third quarter of FY24 stood at Rs 1,320 crore, down 1.85% from Rs 1,345 crore recorded in the corresponding quarter previous year.

EBITDA rose 2.8% to Rs 1,641 crore in Q3 FY25 as against Rs 1,641 crore posted in Q3 FY24. EBITDA margin reduced by 210 bps to 10.1% in the quarter ended 31 December 2024.

EBIT stood at Rs 1,506 crore, up 1.9% YoY while EBIT margin declined by 203 bps to 9.3% posted in Q3 FY25.

During the quarter, the company's total income from jewellery business grew by 26% YoY to Rs 14,697 crore in Q3 FY24. The India business grew by 25% in the same period. The festive quarter brought consumer cheer, with secondary sales recording an impressive 28% growth, buoyed by higher gold prices, wedding-related purchases growing by 29%, and healthy same-store sales growth of 22%, respectively, compared to Q3FY24. Gold jewellery and coins continued to be a preferred choice among consumers, together clocking a strong 27% growth over Q3FY24. EBIT stood at Rs 1,398 crore, with a margin of 9.5% for the quarter.

Normalizing for the custom duty impact of Rs 253 crore, Q3FY25 EBIT was Rs 1,651 crore, with a margin of 11.2%. During the quarter, Tanishq opened 11 new stores (net), while Mia added 13 stores in the domestic market.

The watches & wearables business reported a total income of Rs 1,128 crore for Q3 FY25, reflecting a 15% growth compared to the same period last year. The domestic business saw growth of 14% during this period.

The company's analog segment recorded a robust 20% growth over Q3 FY24, primarily led by the Titan brand clocking 18% growth in the same period. Consumer preferences for premium brands were also visible with international brand sales clocking a healthy retail growth of 30% over Q3 FY24.

However, the wearables segment declined by 20%, with both average selling prices and volumes declining by 8% and 7%, respectively, compared to Q3 FY24. EBIT came in at Rs 111 crore, clocking a margin of 9.8% for the quarter. 23 stores net were added in Q3 FY25, comprising 12 stores in Titan World, 10 in Helios and 1 in Fastrack, respectively.

EyeCare business recorded total income of Rs 194 crore in Q3 FY25, grew 16% over Q3 FY24. International brand sales recorded a strong growth of 56% over Q3 FY24. Within product categories, sunglasses sales outpaced others, growing 35%, while frames and lenses grew in mid-double digits over their respective Q3 FY24 numbers. Business recorded an EBIT of Rs 21 crore, clocking a margin of 10.8% for the quarter. Division closed 3 new stores (net} during the quarter in Titan Eye+.

The emerging businesses comprising of Indian dress wear Taneira, fragrances, and fashion accessories (F&FA) recorded a total income of Rs 118 crore for Q3 FY25, growing 5% compared to Q3 FY24. Taneira recorded flattish sales for the quarter. Fragrances recorded a healthy growth of 27% over Q3 FY24, led by 23% growth in SKINN. Within Fashion Accessories, excluding the discontinued belts & wallets segment, women's bags (IRTH & Fastrack) clocked an impressive growth of 25% over the same period last year. The emerging businesses together recorded a loss of Rs 32 crore for the quarter.

During the quarter, IRTH opened its first store in Mumbai, followed by a store opening in Chennai. Taneira opened 1 new store in Salem, Tamil Nadu, during the quarter, taking the total store count to 82 stores covering 42 cities.

The international jewellery business recorded an income growth of 64% to Rs 569 crore compared to Q3 FY24, largely driven by growth from the North America region and new store expansions. Other businesses comprising primarily of analog watches grew 86% compared to Q3 FY24.

During the quarter, 2 new Tanishq stores were opened, one in Dubai and Seattle each. The Jewellery international footprint stands at 20 stores consisting of 18 Tanishq stores and 2 Mia stores. Titan Eye+ international presence stands at 4 stores.

Among subsidiaries, Caratlane Trading's total income grew 27% to Rs 1,117 crore compared to Q3 FY24 (excluding bullion and digi-gold sales). Activations and promotions during the festive quarter led to 22% growth in brand searches. EBIT came in at Rs 131 crore for Q3 FY25, clocking a margin of 11.7%.

During the quarter, Caratlane added 19 new stores (net) in India, taking the total India store count to 305 stores spread across 128 cities. The brand opened its first international store in New Jersey, USA, in this quarter.

Titan Engineering & Automation (TEAL) recorded a total income of Rs 193 crore in Q3 FY25, declining by 4% compared to Q3 FY24. Within divisions, the automation solutions (AS) revenue declined by 14% and the manufacturing services revenue grew 12% in the same period, respectively. EBIT for the quarter came in at Rs 33 crore, clocking a margin of 17%.

C K Venkataraman, MD, Titan Company, said, The festive quarter gone by firmly established the FY25 growth trajectory after a muted Q1 and healthy Q2. Jewellery saw its strongest quarter (yet) for the fiscal year, growing well in excess of 25% at a retail level. Consumer preference for gold, both as adornment jewellery and as a store of value continued to remain fairly strong. Our analog watches clocked a healthy retail growth of 20%, reinforcing Titan's customer value proposition in the eyes of the consumer. EyeCare's retail growth returning to double-digits was encouraging.

The custom duty related losses on the inventory (held at the time of the duty change) have been fully realized in this quarter and hence the profitability is lower to that extent. We are committed to investing in the growths of all our businesses and specifically the emerging ones to help them scale faster. We remain optimistic on our performance and hope to end the fiscal year with a good growth over FY24.

Titan Company, a joint venture between the Tata Group and the Tamilnadu Industrial Development Corporation (TIDCO), commenced its operations in 1987 under the name Titan Watches. In 1994, Titan diversified into Jewellery (Tanishq) and subsequently into EyeCare.