Titan posts pre-tax loss of Rs 335 cr in Q1 as lockdown washes out sales

It had reported a profit-before-tax of Rs 523 crore in the corresponding quarter of previous fiscal

With major part of the quarter being a complete washout because of the lockdown and disruptions caused by the Covid-19 pandemic, Titan on Monday posted a pre-tax loss of Rs 335 crore for Q1 of FY21. It had reported a profit before tax (PBT) of Rs 523 crore in the corresponding quarter of the previous financial year. 

The Bengaluru-headquartered firm posted a consolidated net loss of Rs 270 crore during the quarter. It had posted a net profit of Rs 371 crore for the corresponding quarter in the previous financial year. The firm posted a decline of 62 per cent in consolidated revenue for the quarter, with total income declining to Rs 1,862 crore, as compared with Rs 4,939 crore in the corresponding quarter of the previous financial year.

“The lockdowns impacted the company’s operations in April and May, as most stores were closed. While stores started opening in May after Unlock 1.0, even as at the end of June only 83 per cent of all the stores opened, and even for stores that were opened, many of them were not operating for all days,” said the company in a BSE filing. 

The recovery rate of revenue is seeing a slow improvement and as of the quarter end, it was 21 per cent for the watches and wearable division, 25 per cent for the eyewear division, while 77 per cent for the jewellery division.

The company expects to grow on top line by the fourth quarter of the current financial year, said Subbu Subramaniam, chief financial officer of Titan.   

“The recovery in business, particularly in the jewellery section, is encouraging and we expect to get back to normalcy by the fourth quarter of this year. The company’s reassessment of its cost structure during this period and inherently strong balance sheet will help it to create a stronger base for a sustainably higher profit margin business,” said C K Venkataraman, managing director of the company.

The jewellery division recorded an income of Rs 1,824 crore for the quarter as compared to Rs 4,164 crore last year, a decline of 56 per cent. The impact on the watches and eyewear businesses was much higher, with the segments recording a revenue decline of 89 per cent and 80 per cent, respectively, for the quarter. While the watches business recorded an income of Rs 76 crore against Rs 716 crore in the previous year, the eyewear business clocked an income of Rs 30 crore as against Rs 149 crore last year.