Jewellery leads Titan’s 54.3 percent Op Inc 29 per cent PAT growth in Q2-2015

BENGALURU:  For the past few quarters, Titan Company (Titan) jewellery business has been pulling down the company’s numbers. This quarter (Q2-2015 which ended 30 September 2014), this business under its jewellery distribution brands Tanishq and Goldplus from Tata showed an upsurge in retail sales by as much as 75 per cent and 84 per cent, respectively. Overall, as per Titan’s investor presentation, jewellery business witnessed y-o-y growth in net income of 64.8 per cent from Rs 1,777 crore in Q2-2014 to Rs 2,929 crore in the current quarter.

Note : 100,00,000 = 100 Lakhs = 10 million = 1 crore

The company’s Total Income from Operations (TIO) went up 54.3 per cent in TIO to Rs 3593.07 crore in Q2-2015 from Rs 2328.97 crore in the corresponding year ago quarter and grew 24.3 per cent from Rs 2891.44 crore in the immediate trailing quarter Q1-2015.

Titan has three revenue segments – watches having the brands –Titan, Xylus, Nebula, Sonata and Fastrack and Zoop; Jewellery (the largest segment in terms of revenue and consequently profits) with Tanishq, Zoya, Gold Plus from Tata, Mia and Fq teen diamonds; and ‘Other’ such as eyewear under the Titan EYE+ brand, apparel and eyewear also under Fastrack brand and precision engineering among others.

Titan MD Bhaskar Bhat said, “This was an extra-ordinary quarter for the company and we witnessed an income growth of over 55 percent on account of an encouraging performance by all divisions, especially the jewellery business where the accounts of our Golden Harvest Scheme customers had to be closed based on regulatory changes. We have also seen an improvement in consumer sentiment in the second quarter and many of our brands ran successful activations to build on this sentiment and the festive mood. Gold prices have been stable and inflation is falling which would help in providing a lift to the economy. However, the coming quarter will have to be observed and tackled appropriately as some channels are beginning to report lower walk-ins. All our brands will invest in new campaigns in this quarter to improve our connect with the consumer.”

Titan’s Watches division has also done well in the quarter backed by successful activations for both Titan and Fastrack brands, says the company in its press release. A new brand campaign on ‘gifting of time’ went on air for Titan watches. The income for watches was Rs 527.46 crore in Q2-2015 as compared to Rs 439.07 crore in the corresponding quarter last year.

Other businesses of the company comprising Precision Engineering, a B2B business, the Eyewear business and accessories grew by 20.9 percent in Q2-2015 versus Q2-2014. The combined income of these businesses was Rs 137.90 crore in the current qaurter. Their last year income for Q2-2014 was Rs 114.03 crore.

The company has spent higher amount towards advertising (ASP) in Q2-2015 at Rs 105.83 crore (2.9 percent of TIO), which was 12.2 percent higher than the Rs 94.35 crore (4.1 percent of TIO) in Q2-2014 and 6.6 percent more than the Rs 99.25 crore (3.4 percent of TIO) in Q1-2015.

Over the 11 quarter period starting Q4-2012, Titan’s ASP shows an increasing trend in absolute rupee terms, but in terms of ASP as percentage of TIO, the trend shows a decline. Please refer to Fig A below.

During the period under consideration, the company’s highest ASP in absolute rupee terms was in Q3-2014 at Rs 118.04 crore (4.4 percent of TIO). This was the highest ASP in FY-2014. Q3-2013 ASP was also the highest in FY-2013 at Rs 108.76 crore (3.6 percent of TIO).

Also, during the period under consideration, the company’s highest ASP in terms of percentage of TIO was in Q1-2013 at 4.7 percent (Rs 103.44 crore). Historically, during the period under consideration, though Titan’s Q2-2013 TIO was higher than the TIO in Q1-2013, the company’s ASP had gone up in absolute rupee terms in Q3-2013, but was lower in terms of percentage of TIO as compared to both Q1-2013 and Q2-2013.

In Q1-2014, the company’s ASP was higher in absolute rupees at Rs 104.67 crore as compared to the Rs 94.35 crore in Q2-2014. However, in terms of percentage of TIO, Titan’s Q1-2014 ASP at 3.4 percent was lower than the 4.1 percent in Q2-2014 or the 4.4 percent in Q3-2014.

If the company wants to push towards record sales and profits in FY-2015, the chances of the company spending more towards advertising spends in Q3-2015 are quite high going by what Bhat has said in the company’s earnings release.

Y-o-y the company’s PAT improved 28.6 percent to Rs 239.98 crore in Q2-2015 from Rs 186.65 crore and went up by 35.4 percent from Rs 177.27 crore in Q1-2015. Please refer to Fig B below.

During the 11 quarter period under consideration, Titan’s PAT shows an upward trend in absolute rupee terms, but seems to have flattened out at about 7.2 percent of TIO, maybe could even decline fractionally.

Latest Reads
WATConsult's Rajiv Dingra launches RD&X

NEW DELHI: Rajiv Dingra (previously founder and CEO of WATConsult, a digital agency part of global network Dentsu International) has announced the launch of his latest entrepreneurial venture, RD&X Network -- a deep-tech network that will drive brand, business, media and data transformation...

MAM Marketing MAM
Indian musicians reinterpret global artists in Paytm Insider’s ‘Jim Beam Originals’

MUMBAI: Paytm Insider’s penchant for creative innovation with Jim Beam’s enthusiasm stirred into the mix has resulted in the creation of the novel musical property Jim Beam Originals. In this series of 10 virtual music experiences, famous Indian musicians will reinterpret legendary international...

MAM Marketing MAM
Faboom Witnesses Significant Increase in its User-Engagement During IPL 2020

NEW DELHI: Indian Premier League 2020 has been taking over the audience with a bang, the buzz for cricket as a sport is only seen elevating by every match. The cricket fever has not only glued the nation to the screen passionately but also has them biting their nails with commendable performances...

MAM Marketing MAM
BookMyShow’s new campaign marries entertainment and safety

NEW DELHI: BookMyShow has released its latest campaign film ‘Unlocking Life’ which explores the theme of people revisiting their favourite forms of out-of-home entertainment experiences in the new normal.  The ‘Unlocking Life’ campaign comes at a time when the entertainment sector in the country is...

MAM Marketing MAM
CEAT appoints HUL’s Priya Nair as additional director

KOLKATA: Tyre manufacturer CEAT has appointed Hindustan Unilever Limited’s Priya Nair as additional director in the capacity of independent director. Her appointment is effective from 27 October, for a tenure of five years.

MAM Marketing MAM
Sweet success: How Apis is achieving its B2C goals through IPL

NEW DELHI: If a brand wants to reiterate its positioning or share new positioning; introduce a new product/service or range; induce high brand recall or saliency, the Indian Premier League (IPL) is the perfect platform for it. The cricket extravaganza attracts undivided attention from millions of...

MAM Marketing MAM
Odisha's rich art & architecture inspires Reliance Jewels new campaign

MUMBAI: Reliance Jewels’ has launched a new ad campaign featuring its new festive collection ‘Utkala Where Beauty Rises’, inspired by Odisha's rich art and architectural history. The film captures patterns and designs that embody the state’s art, tradition and culture, and gives a tour into the...

MAM Media and Advertising Ad Campaigns
For the footwear industry, the other shoe has dropped

Covid2019 has severely impacted the economy at large, with every sector struggling with its own set of challenges. The footwear industry is no exception. In the past few months, shoe brands have witnessed a fall in sales as people have mostly stayed home and are hesitant to step out, thereby...

MAM Marketing Brands
upGrad promises #KaamKiDegree for MBA aspirants in new ad

Ed-tech company upGrad has come up with a new campaign called #KaamKiDegree to promote its MBA vertical. Conceptualised by The Womb, the ad taps into the surging demand for online upskilling amid the pandemic.

MAM Marketing MAM

Sign up for our Newsletter

subscribe for latest stories

* indicates required