Titan Company fell 2.11% to Rs 1206.70 after the company's standalone net profit declined 37.8% to Rs 199 crore on 11% fall in net sales to Rs 3892 crore in Q2 September 2020 over Q2 September 2019.
Profit before tax (PBT) in Q2 FY21 stood at Rs 238 crore, down by 44.5% from Rs 429 crore in Q2 FY20. The result is after a provision of Rs 34 crore for dues from a broker relating to commodity hedging. Total tax expense declined by 64.2% to Rs 39 crore in Q2 FY21 over Q2 FY20.
Titan reported an 89% recovery in sales in Q2 of FY 2020-21 led by sharp recovery in the Jewellery division post the significant disruption caused by the COVID-19 pandemic in India in the first quarter of the fiscal.
"With the lockdowns being lifted in most parts of the country, the company was able to operate most of its stores across all its divisions. Customer walk-ins have started improving even as social distancing norms remain. The recovery rate of revenue improved substantially in the quarter, with the rate being 55% for the Watches and Wearables division, 98% for the Jewellery division and 61 % for the Eyewear division," Titan said in a statement.
"While the customer sentiment improved substantially in the quarter, there was greater willingness to spend on plain gold jewellery and gold coins rather than pure discretionary items, explaining the reason why the recovery rates in Watches and Eyewear and even studded jewellery within the Jewellery division were lower, it added.
The company's jewellery division recorded an income of Rs 3,446 crore for the quarter (excluding gold bullion sales) as compared to Rs 3,528 crore last year, a decline of 2%.
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The watches and wearables business recovered well in the quarter to record an income of Rs 400 crore against Rs 719 crore in the previous year, a decline of 44%.
The eyewear business also improved with revenues declining by 39% in the quarter, recording an income of Rs 94 crore as against Rs 154 crore last year.
Other segments of the company comprising Indian dress wear and accessories recorded an income of Rs 23 crore compared to Rs 44 crore in the previous year, a decline of 48%.
C K Venkataraman, managing director of the company stated that "The recovery that the company has witnessed in the quarter has been very satisfying and the positive consumer sentiment witnessed gives rise to hope that the festive period could be good for all the divisions of the company. The company continues to gain market share in its key businesses aided by innovation and total commitment displayed by its employees and the extended business associate network. The focus on cost and capital employed has helped the company manage its bottom line and cash flows very well."
On a consolidated basis, the company's net profit fell 44.4% to Rs 175 crore on a 10.3% decline in net sales to Rs 4,127 crore in Q2 FY21 over Q2 FY20.
Titan Company is engaged in making and selling watches, jewellery, eyewear and others. The company's retail chain (including CaratLane) stands at 1,832 stores, as on 30 September 2020 with a retail area crossing 2.4 million sq ft for all its brands covering 290 towns.
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