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Titan’s Q2 net up 34%, says room to increase market share is huge

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  • Titan reported 33.7% year-over-year growth in stand-alone net profit in the second quarter to ₹857 crore.
  • The company said there was growth in all of its business segments, with retail sales growing between 17-19% in its core businesses.
  • Titan also revealed that its net number of stores increased by 105 to 2,408 in the second quarter.

Titan, India’s largest branded jewelry maker, reported 33.7% growth in second-quarter standalone net profit from ₹641 crore in the same quarter last year to ₹857 crore.

As the party mood trickled in in the September quarter, operating revenues rose 17.5% yoy to ₹8,134 crore. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 28.9% yoy to 1,294 crore during the quarter.

EBITDA margins also increased to 15.6% in the September 2022 quarter from 14.3% a year ago. Jewelery margins were also 15.3% for the quarter. However, the company said it is a blip and will “normalize” to 12-13% in the long run.

The share of the jewelry business in the company’s revenue was 94% in the second quarter. The company said it saw growth across all of its business segments, with retail growth of between 17-19% in major companies such as jewelry, watches and wearables and eye care.

“Despite an uncertain macro environment, the current festive season, which starts from September and runs until the end of October, is quite positive and consumer confidence remains optimistic,” said CK Venkataraman, general manager of Titan Company.

Titan also revealed its net store count grew 105 in the second quarter, slightly slower than in the previous quarter, when the company added 125 stores. Titan’s total number of stores reached 2,408 in 382 cities at the end of September 2022.

“At the entry points, we’ve seen a good healthy pickup on gold and studded (jewelry). In the 50,000-1,000,000 segment, there’s some pressure at the buyer level, but it’s easier in the higher segment,” the company said during the earnings call, noting that the intensity of price competition is high as small jewelers step up their game. retain customers.

Here’s Titan’s Q2 in numbers:

Particularities Q2 FY23 Q1 FY23 Q2 FY22
Revenue from operations ₹8,134 crores ₹8,493 crore ₹6,921 crore
Net profit ₹857 crore ₹793 crore ₹641 crore
EBITDA ₹1,294 crore ₹1,208 crore 1,004 crore
EBITDA margin 15.6% 14% 14.3%

Source: Company Reports

“We are able to attract new buyers. The scope for us to grow on market share itself is enormous. Unlike other discretionary spending, jewelry is also a store of value,” the company said in the earnings call, explaining its growth prospects in FY24. It echoed this with an example of a customer who bought jewelry worth ₹ twice in 20 days. 2 lakh.

It is worth noting that the demand for gold jewelry increased by 10% in the period January-September 2022 to 380.7 tons, compared to the same period in 2021. However, according to a report, it is still below the pre-pandemic level of 395 .6 tons in 2019. by the World Gold Council.

Demand for weddings has remained subdued in the first half of FY23, the company said, adding that there isn’t enough clarity for the rest of the year.

Jewelery segment is growing fastest

The jewelry segment grew the fastest year-over-year, with the watches and wearables segment coming in a close second.

Titan’s watches and wearables segment includes brands such as Titan, Fastrack, Raga by Titan and Tommy Hilfiger.

“The strong desire to own more premium/differentiated watches resulted in double-digit volume growth in the Titan brand and in the Helios channel,” the Tata group company said in its exchange request.

Segment Revenue Q2 FY23 Q2 FY22 Change
Watches & Wearables ₹829 crore ₹687 crore 20.7%
Jewelery ₹7,685 crore ₹6,298 crore 22%
eye care ₹167 crore ₹160 crore 4.4%
others ₹73 crores 46 crore 58.7%
For Business ₹36 crores ₹29 crore 24.1%

Source: Company Reports

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