Titan Company, India’s largest jewelry retailer and a part of the Tata Group, said second quarter revenue from its mainstay jewelry division was almost at the same level as what was seen in the same quarter last year, while its eyewear and watches division continued to suffer from the impact of the pandemic.
The jewelry division recorded revenue of Rs. 3,446 crores for the quarter (excluding gold bullion sales) as compared to Rs. 3,528 crores last year, a decline of 2%.
It should, however, be noted that the price of gold has been considerably higher this year compared to last year.
The watches and wearables business had revenue of Rs. 400 crores against Rs. 719 crores in the previous year, a decline of 44%.
The eyewear business reported a revenue decline of 39%, recording an income of Rs. 94 crores as against Rs. 154 crores last year.
The other segments of the company, comprising Indian dress wear and accessories, recorded an income of Rs. 23 crores compared to Rs. 44 crores in the previous year, a decline of 48%.
The company sold gold bullion worth Rs 391 cr to shore up its finances and take advantage of higher prices for the metal.
As a result, the total revenue of the company was down only 2% on year at Rs 4,389 cr, compared to Rs 4,466 crores for the second quarter of last year.
Excluding the impact of the gold bullion sales, revenue was down 11%.
It even declared a profit before tax of Rs 238 crores, compared to Rs 429 crores in the previous year.
“Customer walk-ins have started improving even as social distancing norms remain,” it said.
“While the customer sentiment improved substantially in the quarter, there was greater willingness to spend on plain gold jewelry and gold coins rather than pure discretionary items, explaining the reason why the recovery rates in Watches and eyewear and even studded jewelry within the Jewelry division were lower,” it said.
Profitability was on the lower side across divisions.
Despite bouncing back on the top line, the Jewellery division saw earnings before interest and tax (EBIT) fall to Rs 285 cr from Rs 384 cr last year because of the fact that plain jewelry carries far lower margins than studded jewelry.
The watch division reported a loss of Rs 4 crores for the quarter compared to EBIT of Rs 113 crores in the previous year.
The eyewear division actually managed to swing to a profit this year. It reported EBIT of Rs 9 crores compared to a loss of Rs 31 crores in the previous year.
It said its War on Waste program has been running better than plan and has contributed significantly to the bottom line during the current fiscal.
The Company’s retail chain (including CaratLane) stood at 1,832 stores as on 30th September 2020 with a retail area crossing 2.4 million sq.ft. for all its brands covering 290 towns.