Titan's Q4 margin surprise fails to impress over pressure in jewellery biz

Expectations of margin pressure, mainly in jewellery business, which contributes over 80% of Titan's overall operating profit, is a key reason why the Street is worried.

Titan’s March 2020 quarter (Q4) numbers, announced on Monday after market hours, provided mild comfort. The jewellery-to-watch major recorded sharp improvement in operating profit margin, even with a 5.2 per cent year-on-year (YoY) decline in revenue to Rs 4,429 crore.  
 

Even as the top line was in line with analysts’ estimate of Rs 4,425 crore, reported Ebitda margin expanded by 388 basis points YoY to 13.6 per cent — ahead of estimates of around 10 per cent.

Key segments including jewellery, watches, and eyewear saw improvement in margins. Therefore, profit before tax rose 10.9 per cent YoY to Rs 515.6 crore,