Titan announces Q4 business update

Titan Company said that consequent to the serious disruptions in operations in March, revenue growth for the quarter and consequently for the year has been impacted severely.

Titan Company announced its Q4 March 2020 business update after market hours on Wednesday.

Titan said that the quarter commenced well with the growth largely in line with targets till the beginning of March. In the early stages of the corona virus epidemic, it was thought that the epidemic might be restricted to China and therefore the concern was essentially on supply chain disruptions. However as the epidemic spread and WHO announced it as a pandemic, sales started dipping sharply in March particularly in the Watches segment. Shopping malls were also ordered to be closed in early March in some states.

The company said that due to the serious disruption in operations caused by COVID-19 in March, revenue growth for the quarter and consequently for the year has been impacted severely. The company said it is working out its strategy to manage this crisis with particular focus on ensuring adequate liquidity till normalcy returns. The Tata Group Company also added that cost will be another major focus area for the company in these trying times.

Titan's Jewellery division declined by 5% due to lost sales in the month of March 2020. Revenue growth of January & February month was at about 16.5%. The diamond studded activation in the quarter did well and wedding jewellery sales continued to be good till the disruption.

The fourth quarter growth of the 'Watches & Wearables' division grew at 1% despite significant loss of sales in the month of March. The company said E-Commerce was the fastest growing channel for both Q4 and FY20. Retail sales in Large Format Stores or LFS also grew well aided by Valentine activation sales and new product introductions.

In Eye Wear segment, the company reported a 20% decline in revenue for the quarter ending 31 March 2020 due to decline in trade channel. The company reported a flat growth for January & February.

Titan's other businesses witnessed a growth of 42% during the quarter over the same period last year. In Fragrances, Fastrack perfumes continue to increase its distribution reach and is now available across over 1,800 outlets and ecommerce channel. 'Taneira' opened two stores during the quarter, one each in Mumbai and Bangalore, taking the total store count for the business to twelve covering five cities.

Titan's subsidiary CaratLane posted a sensational growth of 48% in January 2020 and February 2020. But the disruption caused in March resulted in a growth of only 18% for the quarter. The company said, Caratlane was more impacted as many of the stores were located in malls that were shut in early March.

Among its subsidiaries, Titan Engineering and Automation (TEAL) posted a growth of 39% for the quarter and 35% for the financial year. The company said automation division and the aerospace and defense divisions did exceptionally well in the year.

Shares of Titan Company closed 3.47% lower at Rs 913.80 on Wednesday. Titan Company is engaged in offering watches, jewelry and others.

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