Titan Q2 Results: Net Profit Drops 23% YoY Despite 26% Growth in Total Income

Titan’s Q2 FY25 net profit declined 23% YoY to ₹704 crore, despite a 26% rise in total income. Jewellery and watches saw double-digit growth, yet customs duty and expansion investments impacted profit.

By Aayushi Dubey Nov 5, 2024, 18:11 IST

Titan Company’s Q2 FY25 results, released on November 5, 2024, reveal a 23.1% year-on-year (YoY) drop in net profit to ₹704 crore, compared to ₹916 crore in Q2 FY24. Despite this decline, Titan's total income for the quarter showed significant growth, surging by 26% YoY to reach ₹13,660 crore, up from ₹10,837 crore in the same period last year. However, profitability was impacted by customs duty-related losses and investments aimed at fueling growth across its various business segments.

Strong Performance in Jewellery and Watches Segments

The jewellery business, Titan’s largest revenue driver, recorded a 25.5% YoY increase in total income, reaching ₹10,763 crore. This growth was supported by healthy buyer demand and robust sales in both gold and studded categories. Titan’s multi-brand approach in jewellery, including popular brands like Tanishq, Mia, Zoya, and CaratLane, continues to attract diverse customer segments, contributing significantly to the company’s top-line growth. However, the jewellery segment’s EBIT fell by 22.7% YoY to ₹932 crore, with its EBIT margin dropping by 540 basis points to 8.7%, a decline attributed to rising costs.

The Watches & Wearables division also performed well, reporting a 19.1% YoY increase in total income to ₹1,301 crore, up from ₹1,092 crore in the September 2023 quarter. Analog watches saw notable demand, with volumes climbing over 25% YoY. The Titan brand continues to maintain its reputation as a top choice among Indian consumers in the timepiece category, further strengthening its market position.

EBITDA and Profitability Pressures

Titan’s consolidated EBITDA for Q2 FY25 was ₹1,358 crore, marking an 11.5% YoY decline from ₹1,535 crore in the previous fiscal’s corresponding quarter. This drop in EBITDA reflects the impact of customs duty losses and Titan’s ongoing investments in growth initiatives across its business segments. These factors have put pressure on profitability in the short term, but Titan remains optimistic about its growth potential and competitiveness across its key markets.

Management Commentary

CK Venkataraman, Managing Director of Titan Company, expressed confidence in the company's diversified portfolio strategy, which he believes has helped capture growth in consumer demand. "Q2 witnessed encouraging growth across key businesses, particularly in jewellery, where double-digit growth was achieved," he stated. The company’s focused approach across brands like Tanishq and CaratLane is effectively meeting customer needs across different segments.

Looking forward, Titan remains optimistic about its performance in the second half of the fiscal year. The company anticipates continued growth in its core businesses and expects the recent investments in new markets and product categories to yield long-term benefits.