Titan Company Reports 135.6% Growth in Net Profits and 30.6% Increase in Revenues for Q3 FY 22

Tata Group’s Titan Company Limited reported a 135.6% growth in standalone net profits for the third quarter of FY 21-22 from the previous fiscal. Its profit has grown to Rs. 987 crores considerably higher than analysts’ estimates at Rs. 847 crores.

The Titan Company witnessed strong growth clocking 30.6% higher revenue from operations Year-on-Year (YoY) to Rs. 9,515 crores, higher than analysts’ estimates of Rs. 9,337 crores. Its sale of products rose by 36% for the same period to Rs. 9381 crores from Rs. 6,912 crores last year.

The company’s jewellery segment under Tanishq contributed most to its revenues and profit. The following sections will cover the details of this company’s profits.

Titan Company – A Brief Overview

The Titan Company was established in 1984 as a partnership between Tamil Nadu Industrial Corporation and the Tata Group. Today, it is the world’s fifth-largest wristwatch maker and India’s largest watch manufacturer.

This company has four main business segments- Watches and wearables, eyewear, jewellery and ‘others’ (includes Indian garments, accessories and fragrances). Titan Company produces watches under its domestic brands- Titan, RAGA, Fastrack, Nebula, Octane, Sonata, Regalia etc.

It also offers watches under popular international names like Xylys, Tommy Hilfiger, FCUK and Timberland & Police. The company has sold over 150 million watches, exporting to over 32 countries.

Titan Company also sells precious jewellery under the popular brand Tanishq and has a luxury retail chain called Zoya. The eyewear segment offers frames, lenses, and contact lenses under brands like Titan Eye+, Dash, Levis, Hugo Boss, and Esprit. Its additional offerings include personal accessories, including belts, wallets, bags and perfumes.

Since its start as Titan Watches Limited, the company transformed the watch manufacturing and jewellery business of India. It set up its first integrated watchmaking facility in 1987 at Hosur, Tamil Nadu. In 1995, it set up its Tanishq brand to capitalise on the fragmented jewellery market.

The Titan Company launched its affordable wristwatch brand Sonata in 1998. In 2003, it diversified into fashion and prescription eyewear with its Fastrack Eye-Gear. It launched its second jewellery brand Gold Plus for the mass market in 2005 and the ‘Swiss-made’ watch segment, Xylys, next year.

Over the years, Titan Company has established many retail stores across its watches, jewellery and eyewear business segments. As of its last quarterly update (on 21 December 2021), Titan Company has 1935 standalone stores. The company has 682 eyewear stores, 428 jewellery stores and 809 watches and wearable stores.

Titan Company Financial Performance from 2020

Last year, the Covid-19 pandemic hurt Titan Company’s bottom line, like numerous other businesses. Its total income as of FY 2020-21 stood at Rs. 20,783 crores, up by 3% from Rs. 20,156 crores in FY 19-20. Meanwhile, the company’s PAT (Profit after Tax) decreased by 41% from Rs. 2,105 crores to Rs. 1,233 crores.

Since then, the Titan Company has completely recovered and witnessed strong growth over pre-pandemic levels. Festive purchases in October and November 2021 has driven the company’s income across jewellery, eyewear, watches, wearables, dress wear and accessories segments.

In sharp contrast to last year’s performance, the total income from Q3 FY 22 witnessed a 31% growth to Rs. 9,570 crores, including bullion sales. Excluding bullion sales, the total revenue had grown 36% from FY 20-21. Its total income for 9 months ending FY 22 was Rs. 20,104 crores, a 48% increase over last year.

The following table describes this company’s financials for 3 month’s period (All figures in Rs. crores)

Titan Company’s Revenues from Different Business Segments

Here is how Titan Company’s different business segments performed:

• The jewellery segment registered a 37% growth in income to Rs. 8,563 in Q3 FY 22.

• In the watches and wearables business, Titan Company witnessed 29% income growth to Rs. 708 crores from Rs. 550 crores in Q3 of last year.

• In other segments (Indian dress wear, fragrances, accessories), the company recorded a 44% growth to Rs. 52 crores.

• The Eyewear business saw its income increase to Rs. 156 crores from Rs. 124 crores in Q3 FY 22, a growth of 26%.

• TEAL (Titan Engineering & Automation Limited) recorded revenue of Rs. 79 crores and profits before tax of Rs. 5 crores. This is lower than the previous year’s revenue of Rs. 87 crores and profit before tax of Rs. 6 crores.

• CaratLane Trading Private Limited clocked revenue of Rs. 446 crores compared to Rs. 273 crores in Q3 FY 21. Its profits too increased from Rs. 16 crores to Rs. 28 crores in Q3 FY 22.

Bottom Line

The festival quarter brought strong demand and revenues across Titan Company’s various business segments. During October-November 2021, the company saw more walk-ins and new customers at Tanishq, resulting in significant revenue uplift. The reopening of the economy after the second wave led to a record wedding season, which increased Titan’s sales.

Frequently Asked Questions

1. How many stores does the Titan Company have in India?

As of its last annual report, Titan Company has 1909 stores with a total retail space of 2.5 million sq ft. It has over 7000 multi-brand watch outlets and 662 watch care centres.

2. What was Titan Company’s operating profit for Q3 FY 22?

The company’s operating profit was as strong as its bottom line for the reported quarter. Its operating profit jumped 63% over the previous year’s Rs. 1,398 crores while its operating margin rose by 290 basis points YoY.

3. What are some brands of Titan Company other than watches and jewellery?

Other than watches and jewellery, Titan Company offers eyewear under the brands – Titan Eyeplus, Glares and Fastrack and international brands like Levi’s, Esprit and Hugo Boss. It also offers fragrances under its SKINN brand and Indian dress wear (sarees) under Taneira.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.