Titan’s June-quarter earnings were largely in-line, but the management’s warning of not being able to meet jewellery business guidance has spooked investors. S Subramaniam, CFO of the company, discussed the Q1 performance.
Subramaniam said that the 20 percent growth for FY20 jewellery business growth is at risk.
“We have had a very bad second half of June and that unfortunately continued in July. August is looking slightly better and September will be far better because the season starts. We had a bad July and therefore, the impact of that on the first half would be material,” he added.
The Tata Group firm reported a 10.84 percent rise in consolidated net profit to Rs 363.74 crore for the June quarter ended on June 30. Net sales rose to Rs 5,095.10 crore, as against Rs 4,406.57 crore last year.
“Our target for the second year continues to be as they are and we are reasonably hopeful that we should be able to do because our customer surveys have indicated a decent Diwali,” Subramaniam added.
Talking about the watches business, he said, “Watches did well despite consumer slowdown. We target to achieve 13-14 percent growth in this business.”
Titan’s revenue from the watches segment was up 20.10 percent to Rs 716.11 crore. While jewellery was at Rs 4,164.10 crore, up 14.31 percent from a year ago. Revenue from the eyewear segment was Rs 148.78 crore, up 13.08 percent.
According to him, the jewellery business hit badly by higher gold prices, import duty of 2.5 percent and weak sentiment.
“We continue to target opening 60-70 Tanishq stores,” Subramaniam said.