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Titan Industries Sales, Profits +9% in 1Q
Jul 31, 2012 6:30 AM
By Dilipp S Nag
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RAPAPORT... Titan Industries, which owns the Tanishq brand, said that sales fell below expectations in its first fiscal quarter that ended on June 30, as India’s weak economic environment weighed on the retail industry.
The company reported that net sales grew 9 percent year on year to $397 million (INR 22.06 billion) during the quarter, while net profit rose 9 percent to $28.1 million (INR 1.56 billion). Total expenses increased by 9 percent to $361.1 million (INR 20.06 billion).
“The first quarter has been disappointing by way of sales growth due to several factors leading to a weak consumer sentiment,” said Bhaskar Bhat, Titan’s managing director. “Consumer response was good only to discount offers thereby impacting margins, especially in watches and eyewear.”
Bhat added that high inflation, a weak rupee and lower rainfall totals during the monsoon season are likely to have an adverse impact on the company’s targeted growth. He stressed that Titan would maintain its investments in building the brand, expanding its retail network and launching new product lines.
The company reported that jewelry sales, including those from its flagship Tanishq brand, rose 8 percent year on year to $319.6 million (INR 17.8 billion). Watch sales increased 14 percent to $64.9 million (INR 3.61 billion), while sales at its other businesses, comprised of eyewear, precision engineering and accessories, grew 16 percent to $16.1 million (INR 896.2 million).
Titan explained that growth at its jewelry division was further affected by high gold prices as the yellow metal hit a peak price in rupee of INR 3,067 per gram, or about $55, during the quarter. Fewer number of wedding dates during the quarter also hurt watches and jewelry sales.
The company opened 20 stores during the quarter to end the period with a network of 847 stores across its watch, jewelry and eyewear product divisions.
*Note: All data was published in rupee. Any references to U.S. dollar amounts were made according to exchange rate conversions by Rapaport News.
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Tags:
Bhaskar Bhat, Dilipp S Nag, India, jewellery, Jewelry, Rapaport, Tanishq, Titan, Titan Industries, watches
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