Views of Akriti Mehrotra, Research Analyst, StoxBox
1. Revenue stood at Rs. 14,534 crores in Q2FY25 (up 16% YoY / up 10% QoQ), missing the street estimates, on the back of broad-based growth in its domestic jewellery business along with robust growth in its Watches & Wearables division and other business.
2. The company’s largest segment – Jewellery – recorded a revenue of Rs. 10,763 crores (up 26% QoQ) in Q2FY25, driven by strong performance in its India business, which grew 25% in the same period. The segment saw a healthy increase in average selling prices, with both buyer growth and ASPs exhibiting double-digit increases. The reduction in custom duties helped revive consumer interest, particularly as gold prices temporarily cooled off, leading to a gold rush that lasted until mid-September. EBIT for the quarter stood at Rs. 932 crores, reflecting a margin of 8.7%. Normalizing for the impact of custom duties, the EBIT for Q2FY25 was Rs. 1,222 crores, yielding a margin of 11.4%. During the quarter, Tanishq added 11 new stores (net), Mia opened 12, and Zoya added 1 new store.
3. The Watches & Wearables segment recorded a revenue of Rs. 1,301 crores, up 19% YoY, driven by strong domestic performance, which grew 19% in the same period. The segment saw robust growth in the analog category, with revenue rising 26% YoY, led by the Titan brand, which recorded a 32% growth. The premiumization trend continued to gain momentum, with the Helios channel (international brand sales) seeing a significant 43% growth in retail revenue compared to Q2FY24. However, the wearables segment experienced a 13% decline in revenue due to reduced average selling prices. EBIT for the quarter was Rs. 194 crores, delivering a margin of 14.9%. During the quarter, the company expanded its footprint by adding a net 34 stores, including 18 new Titan World stores, 14 in Helios, and 2 in Fastrack.
4. The Eyecare segment recorded a total income of Rs. 201 crores in Q2FY25, growing 7% over Q2FY24. The segment saw healthy volume growth for both frames and lenses, while sunglasses experienced a volume decline due to seasonality. International brand sales, however, saw a strong 53% growth compared to Q2FY24. The business increased its promotional activities, driving double-digit growth in advertising spend compared to last year’s period. EBIT for the quarter stood at Rs. 24 crores, delivering a margin of 11.9%. Titan Eye+ expanded its presence with 3 new stores (net) added during the quarter.
5. The overall EBITDA down 12% YoY / down 1% QoQ to Rs. 1,236 crores, missing market expectations. The EBITDA margin stood at 8.5% in the quarter compared to 11.3% in the corresponding quarter of last year.
6. Profit after Tax stood at Rs. 704 crores (down 23% YoY / down 2% QoQ) in Q2FY25.
After a weak performance in Q1, Titan Ltd. recorded positive growth in Q2FY25 across several important business categories. The jewellery segment’s strong double-digit growth was driven by robust buyer metrics, a diverse brand portfolio including Tanishq, Mia, Zoya, and Caratlane, and strategic investments in consumer promotions, which successfully attracted new clients and boosted sales volumes across both traditional gold jewellery and premium, gemstone-studded pieces. Additionally, the wearable industry has shown encouraging growth and substantially contributed to the company’s expansion goals. With new product launches targeted at appealing to the fashion-conscious youth, the eyecare industry has consolidated, further solidifying its place in the market. While profitability in Q2 was impacted by custom duty-related losses and the need for continued investments in growth initiatives across the businesses, the company remains confident in the competitiveness of its offerings. The company will continue to pursue market share growth and is actively investing in capabilities across all its business segments. Looking forward, we remain constructive about the company’s business prospects, with a single-minded focus on satisfying the ever-evolving needs of lifestyle consumers.
