Titan tightens cost enough to clock a 21% growth in profit⁠— the best in five quarters

• India’s top fashion accessories maker nearly halved advertising expenses in Jan-March 2020 compared to the preceding three months.
• Employee benefits expenses showed a 14% decline in the same period.
• The Board has recommended a dividend of ₹4 per share.

India’s top fashion accessories manufacturer Titan Company share price declined 1.85% on Tuesday after company reported a 21% growth in its net profit to ₹356.79 crore between January and March 2020 compared to the same quarter last year. Although this has been the best profit growth in five quarters.


The company’s revenue from operations was down almost 6% Year-on-Year to ₹4,428.75 crore during the period, the company said.

However, the shares of Titan gained over 4% in trade ahead of the earnings report.


“The Company's strong brand equity and balance sheet along with numerous measures to eliminate wasteful expenditure is expected to help it prevail over the near term challenges,” said CK Venkataraman, Managing Director.

The cost cutting measures were visible in the latest quarterly numbers too.

Cost	Jan-March 2020 (QoQ)
Employee benefits	-14%
Advertising	-46%

The lost quarter

Segment	Growth in Jan-March 2020 (QoQ)
Watches	14%
Eyewear	-17%
Jewellery	-5.80%

The outlook remains grim

It’s not just the wedding business that it stands to lose. Going ahead, fewer people will care to buy jewellery for occasions or otherwise as social gatherings are likely to reduce.

The fears dragged Titan’s share price down by over 32% since the beginning of the year till March 31. However, the shares of Titan are now recovering and have risen almost 25% since May 1— a day after the first 50 stores reopened.

SEE ALSO: Titan says Covid-19 has a 'severe' impact on its Q4 revenues

Without weddings and fewer Indians in a celebratory mood, Titan’s sales to remain muted for the next 2 years