Titan, India’s largest branded jewellery maker, reported a 33.7% growth in standalone Q2 net profit to ₹857 crore from ₹641 crore in the same quarter last year.
As the festive spirit seeped in the September quarter, its revenue from operations went up 17.5% y-o-y to ₹8,134 crore. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 28.9% y-o-y to ₹1,294 crore during the quarter.
EBITDA margins also rose to 15.6% in the September 2022 quarter from 14.3% a year ago. Its jewellery business margins too stood at 15.3% for the quarter. However, the company said that it’s a blip and will ‘normalize’ to 12-13% in the long term.
Jewellery business’s share in the company’s topline stood at 94% in Q2. The company said it saw growth across all its business segments, with retail growth ranging between 17-19% in major businesses like jewellery, watches and wearables and eyecare.
“Despite an uncertain macro environment, the current festive season starting from the end of September month and continuing till the end of October has been quite positive and the consumer confidence remains upbeat,” said CK Venkataraman, managing director, Titan Company.
Titan also revealed that its net store count went up by 105 in Q2, slightly slower than the previous quarter when the company added 125 stores. Titan’s overall store count came in at 2,408 across 382 towns at the end of September 2022.
“On the entry points, we have seen a good healthy pickup on gold and studded (jewellery). In the ₹50,000-1,00,000 segment, there is some pressure at a buyer level, but it is easier in the higher end,” the company said during the earnings call, noting that the price competition intensity is high as small jewellers are stepping up to retain their customers.
“We are able to attract new buyers. The headroom for us to grow on market share itself is huge. Unlike other discretionary expenditure, jewellery is also a store of value,” the company said in the earnings call, explaining its growth outlook in FY24. It reiterated this with an example of a customer buying jewellery worth ₹2 lakh twice in the space of 20 days.
It is worth noting that the gold jewellery demand increased 10% during January-September 2022 to 380.7 tonnes, compared to the same period in 2021. However, it is still below the pre-pandemic level of 395.6 tonnes in 2019, according to a report by the World Gold Council.
Wedding demand has remained muted in the first half of FY23, the company said, adding that there is not enough clarity for the rest of the year.