Titan Q2 Results FY27 Preview: Tata Group’s jewellery and watchmaker Titan Company is expected to report a steady financial performance for the July-September quarter of FY27, with standalone net profit projected to rise over 41 per cent year-on-year (YoY). Revenue is estimated to grow 13 per cent, while operating margins are likely to improve by around 140 basis points.
According to ET Now Research, Titan’s standalone revenue is expected to increase 13 per cent YoY to Rs 18,662 crore from Rs 16,534 crore in the corresponding quarter last year. EBITDA is projected to rise 29.3 per cent to Rs 2,094 crore from Rs 1,620 crore, while net profit is estimated to jump 41.2 per cent to Rs 1,420 crore from Rs 1,006 crore.
The company’s EBITDA margin is expected to expand to 11.2 per cent from 9.8 per cent a year ago. However, the jewellery segment’s EBIT margin is estimated at around 10.8-11 per cent, compared with management’s guidance of 11-11.5 per cent.
Titan Q2 FY27: Business update
Titan’s second-quarter business update presented a mixed picture, with strong growth across watches, eyewear and international operations, alongside some moderation in jewellery demand towards the end of the quarter.
The company’s domestic business recorded 22 per cent YoY growth during the quarter, in line with expectations. Titan added 77 stores on a net basis, taking its total store count to 3,594.
Jewellery business
Titan’s jewellery business registered 21 per cent YoY growth, ahead of estimates of approximately 19.5 per cent.
According to the company’s quarterly update, jewellery demand remained healthy for most of the quarter before witnessing some softening towards the end as festivals shifted to the third quarter.
Tanishq, Mia, Zoya and beYon collectively recorded 20 per cent YoY growth, while CaratLane expanded 32 per cent, exceeding estimates of 28 per cent.
The jewellery division added 42 stores during the quarter, including 29 across Tanishq, Mia, Zoya and beYon, and 13 CaratLane outlets.
Studded jewellery recorded growth in the early thirties, while plain gold jewellery grew 20 per cent YoY. However, demand for investment-led coins moderated from a high base, resulting in a high single-digit decline.
Buyer growth across the jewellery portfolio slowed to mid-single digits from early double-digit growth in the first quarter. Meanwhile, average ticket sizes registered double-digit growth during Q2.
Watches, EyeCare and emerging businesses
Titan’s watches business reported strong growth of 30 per cent YoY, significantly ahead of estimates of around 15 per cent.
The EyeCare segment also delivered 28 per cent YoY growth, compared with expectations of approximately 17.5 per cent.
Emerging businesses grew 21 per cent YoY. Within this segment, fragrances recorded growth in the mid-thirties, women’s bags grew in the twenties, while Taneira registered high single-digit growth.
International business
Titan’s international business recorded 97 per cent YoY growth during the quarter.
Tanishq, Mia and CaratLane reported double-digit growth in North America.
Titan Q2 Results FY27: Key factors to watch
Investors will monitor estimated inventory gains associated with the customs duty revision, which could be reported as an exceptional item.
Other factors in focus include the impact of the Middle East war on Titan’s GCC business and demand trends amid Adhika Maas, the Prime Minister’s austerity appeal and the decline in gold prices.
The distinction between volume and value growth will also be closely watched, along with management’s outlook on gold and diamond prices.
Titan’s commentary on demand during the festive and wedding seasons will remain another key area of focus.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)