Titan Company Expects Q1 Profit to Rise by 6-21%, While Margins May Drop Year-on-Year
Titan Company Expects Q1 Profit to Rise by 6-21%, While Margins May Drop Year-on-Year
Titan Company, a renowned Indian company dealing in various consumer goods, is expected to report a year-on-year increase in net profit for the March quarter. Analysts predict this increase to be in the range of 6% to 21%. The sales for the June quarter are also anticipated to rise by over 20%.
The strong performance in net profit and sales is attributed to robust demand for jewellery, which remained high since Akshaya Tritiya (a major gold-buying festival in India) and continued through wedding sales in June. Despite fluctuations in gold prices during the quarter, the demand for jewellery remained strong, contributing to the company’s overall positive performance.
As Titan Company’s business is significantly influenced by the demand for jewellery, its ability to capitalize on festive and wedding sales has played a crucial role in driving its financial growth during this period. The company’s management and investors will be closely observing the quarterly results to assess its performance and market outlook amid prevailing market conditions.
According to Phillip Capital, Titan Company is expected to report a 16.9% year-on-year rise in profit for the quarter, reaching Rs 926 crore compared to Rs 793 crore in the same quarter of the previous year. Additionally, the brokerage predicts a 20.7% year-on-year increase in revenue, reaching Rs 10,818.20 crore compared to Rs 8,961 crore in the year-ago quarter.
The projected revenue growth is attributed to several factors. These include a favorable base effect from the previous year, higher gold prices during the quarter, and an increase in the number of wedding days, which likely boosted sales of jewelry and related products.
However, Phillip Capital also expects that the company’s Ebitda (earnings before interest, taxes, depreciation, and amortization) margins may experience a 80 basis points year-on-year decline. This decline is due to the fact that the benefit of inventory gains on diamonds, which were available in the previous year, may no longer be present in the current quarter.
According to HDFC Institutional Equities, Titan Company is expected to report a net profit of Rs 960 crore, representing a 21.3% year-on-year increase. The brokerage also anticipates sales to reach Rs 11,510 crore, reflecting a 21.8% year-on-year growth.
On the other hand, Kotak Institutional Equities predicts a slightly lower net profit figure of Rs 837.20 crore for Titan Company, which corresponds to a 5.6% year-on-year rise. The revenue is estimated to increase by 8.7% year-on-year to Rs 9,741.30 crore.
Regarding Ebitda margin, Kotak Institutional Equities foresees a decline of 34 basis points, reaching 12.7% compared to 13% in the year-ago quarter. This decrease is attributed to the base quarter’s margin, which was partly aided by certain one-off gains that may not be present in the current quarter.
It is common for different brokerages and analysts to have varying estimates for a company’s financial performance. These estimates are based on their individual assessments of market conditions, industry trends, and company-specific factors. The actual financial results announced by Titan Company will provide a definitive picture of its performance during the quarter.
According to the brokerage’s modeling, they expect a 12% year-on-year growth in standalone jewelry sales for Titan Company, based on a like-for-like (LFL) basis, excluding the sale of gold bullion. This growth is anticipated despite a high base effect from the previous year. The demand for jewelry showed some softness in the first half of April; however, a revival was observed once the festive period, including Akshaya Tritiya, started. Additionally, the correction in gold prices towards the end of the quarter is likely to have contributed to some improvement in sales growth in June.
In the watches segment, the brokerage anticipates a 20% year-on-year growth for Titan Company. For the eyewear segment, aided by store growth, they expect a robust 22% year-on-year growth.
These projections indicate that Titan Company is expected to witness positive growth across its core segments, including jewelry, watches, and eyewear. The revival in demand during the festive season and other favorable market factors are likely to have contributed to the anticipated sales growth in the June quarter. As the company’s financial results are released, they will provide a comprehensive view of its actual performance during the period.
