Titan tumbles after weak Q3 earnings

Titan Company lost 5.01% to Rs 203.80 at 9:15 IST on BSE after net profit declined 18.8% to Rs 165.57 crore on 11.12% decline in total income to Rs 2701.84 crore in Q3 December 2013 over Q3 December 2012.

The Q3 result hit the market after trading hours on Wednesday, 29 January 2014.

Meanwhile, the S&P BSE Sensex was down 156.70 points or 0.76% at 20,490.60.

On BSE, so far 18,000 shares were traded in the counter as against average daily volume of 1.56 lakh shares in the past two weeks.

The stock hit a high of Rs 210 and a low of Rs 203.50 so far during the day.

The overall trend in sales over the last 3 quarters has been similar across all brands and channels with Q3 December 2013 registering the lowest growth this year due to a poor festive season, Titan Company said in a statement. Titan's income from jewellery business fell 15.4% to Rs 2126.67 crore in Q3 December 2013 over Q3 December 2012. The company said the decline in sales was primarily due to lower demand for gold jewellery. The jewellery industry was adversely impacted by the regulatory measures implemented to restrict gold imports. The first quarter had seen a surge in demand for gold jewellery due to lower gold prices.

Titan's income from watches business rose 7.5% to Rs 455.48 crore in Q3 December 2013 over Q3 December 2012. Titan said that the combined total income of Precision Engineering, a B2B business, the eyewear business and accessories business, jumped 18.6% to Rs 116.52 crore in Q3 December 2013 over Q3 December 2012.

The Titan Company retail chain is 1,039 stores strong (as on 31st December 2013), with the retail area crossing 14 lac sq.ft. nationally for all its brands.

Commenting on the financial performance, Mr. Bhaskar Bhat, Managing Director, Titan Company, said: "The sentiments in the market continue to be weak and the company witnessed an extremely poor retail-sales quarter for both its watches and jewellery businesses. The impact of festive season this quarter was much below our expectations. Although the stock market has picked up, the high inflation levels have resulted in lower disposable income in the hands of consumers. In the last quarter of this financial year we have planned aggressive sales promotions for both watches and jewellery to stimulate demand and generate consumer interest in these categories. We will continue to make adequate investments in mass communication and build our brands".

Titan retails branded gold jewellery under the brand name Tanishq. It sells watches under a premium brand Titan and economy brand Sonata.

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