Titan, India’s leading consumer lifestyle company reported stable June Quarter 2023 results. Revenue from operations came in at Rs 11,897 crore, a rise of 26% YoY. But what concerned investors was low operating margins reported at 9.5%, a fall of 320 basis points (bps) YoY in Q1FY24. Margins were impacted by volatility of gold prices and inventory gain Q1FY23 (base quarter). Profit after tax (PAT) came in at Rs 753 crore, a fall of 4% YoY in Q1FY24. The company has four business segments, jewellery, watches & wearables, eyecare and other emerging businesses.
Jewellery segment (89% of total revenues) reported total Income of Rs 9,755 crore, an increase of 22% YoY in Q1FY24. India business grew by 20% YoY driven by healthy demand during Akshaya Tritiya and an attractive gold exchange program. Buyer growth was 14% and the average ticket sizes moved up by 6% YoY compared to the same period previous year. Wedding segment growth was robust at around 26% YoY contributing 20% to the total revenues. Double-digit growth was aided through aggressive exchange offers, brand building initiatives and pricing rationalization programs. According to the management, “Amidst a volatile high gold rate environment and a rural wedding season, the gold exchange program was dialed up to solve consumer uncertainty”. In new store expansions during the quarter, the GCC region saw a Tanishq addition in Sharjah. In India, jewellery division added 9 stores in Tanishq and 8 stores in Mia by Tanishq. Tanishq’s international presence now covers 7 stores in the GCC region and 1 store in the USA.
The watches & wearables business (8% of revenues) reported total income of Rs 913 crore, up 16% YoY in Q1FY24. Strong revenue growth was backed by a strong growth of 81% YoY in the wearables segment. Analog watches grew at 8% YoY in Q1FY24. According to the management, “Premiumization theme was at the fore with Titan and international brands seeing strong buying momentum clocking handsome double-digit growths in the analog segment.” In wearables, the Fastrack brand grew the fastest clocking sizeable gains in the portfolio. Amongst key channels, e-commerce, LFS and Helios clocked double-digit YoY growth in Q1FY24. Watches & wearables segment added 14 new stores in Titan World, 9 in Helios and 3 stores in Fastrack in the June Quarter 2023.
In the eye care business (2% of revenues), income grew by 11% YoY to clock Rs 203 cr in Q1FY24 . The house brands grew marginally lower than the overall division whereas international brands grew faster at around 17% YoY. Revenues from sunglasses and lenses grew nearly 13% YoY and growth in frames was about 5% YoY . Growth was primarily price driven with average selling price increasing by around 8% YoY and volume growth at around 3% YoY. Eyecare added 5 new stores in Titan Eye+ whereas Fastrack stores expanded its metro presence by adding a store each in Delhi and Chennai in Q1FY24.
Emerging business income was reported at Rs 76 crore in Q1FY24. Emerging business comprises fragrances, fashion accessories and Taneira grew 37% YoY in June Quarter 2023. While fashion accessories grew 12% YoY, Taneira grew 81% YoY in Q1FY24. Income of subsidiaries, Caratlane grew 32% YoY to Rs 640 crore and that of TEAL fell 32% YoY in Q1FY24. Emerging business, Caratlane and TEAL contributed 1% of total Titan revenues in Q1FY24.
