INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Titan Company is likely to report a double-digit rise in net profit for the quarter ended September 2019 despite muted consumer
sentiments during the period
There are hopes that the reduction in tax rates during the quarter may provide some comfort to the bottom line of the watch-to-jewellery
major.
Brokerage firm Prabhudas Lilladher foresees a 25.50 per cent jump in the bottom line in Q2FY20 on just 5 per cent rise in
sales.
“Jewellery volume growth has been impacted by offseason and high gold prices with July seeing negative volumes
However, from Onam onwards, festive momentum is picking up and hence we estimate 13 per cent volume growth in Q2FY20
Other segments remain muted on poor consumer sentiments,” the brokerage house said.
With 20 per cent increase in gold prices YTD,
Titan’s jewellery division (Tanishq) is expected to report a weak quarter in Q2FY20
The management had indicated that the performance in July was particularly weak (seeing revenue de-growth) while green shoots were visible
in August and September.
“We expect the jewellery division to report muted topline growth of 4 per cent YoY in Q2FY20
Owing to the tough market environment and preponing of activation in June, we expect the watches division to report revenue growth of 7 per
Reduction in taxation rate (25.2 per cent versus 31.3 per cent in Q2FY19) is expected to assist net profit growth
Profit after tax is expected to grow 11.5 per cent YoY to Rs 337.6 crore,” ICICI Securities said.
Shares of Titan were trading 1 per cent
down at Rs 1,285.30 ahead of its financial result which is slated to announce later in the day.
An assessment by Edelweiss Securities showed
16.20 per cent and 6.90 per cent YoY growth in net profit and revenue, respectively, for Titan
It projected a 14 per cent YoY rise in EBITDA in Q2FY20.
For jewellery business, the brokerage house sees 6 per cent YoY growth on a base of
In the watch segment, Edelweiss estimated around 10 per cent YoY revenue growth on a base of 17.3 per cent
In eyewear, it expects 12 per cent YoY revenue growth on a base of 19.3 per cent.