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Published 19:14 IST, May 3rd 2024

Titan misses Q4 profit expectations due to higher discounts, gold prices

Titan reported a profit of Rs 786 crore for the quarter ended March 31, marking a 7.1 per cent increase from the previous year.

Reported by: Business Desk
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Titan's profit dip
Titan misses Q4 profit expectations | Image: Shutterstock

Titan Q4 earnings: Jewellery retailer Titan reported fourth-quarter profits that missed analysts' estimates on Friday, attributing the shortfall to discounts offered amid elevated gold prices.

Analysts and traders noted that the surge in gold prices could dampen demand during wedding season, prompting retailers to roll out substantial offers to entice customers.

During an earnings presentation, Titan acknowledged a soft demand environment driven by "volatile and elevated gold prices," necessitating promotional efforts to drive customer acquisition.

These discounts successfully attracted more buyers to Titan's stores, resulting in a 19 per cent revenue increase in its jewellery business, which comprises brands like Tanishq and CaratLane, contributing nearly 90 per cent of total revenue. However, this growth fell short of the 23 per cent reported in the same period last year.

Overall revenue, including Titan's smaller watches and eyewear businesses, saw a 17 per cent increase, while expenses rose by 18 per cent, partly due to higher gold prices. Gold prices rose by 8.2 per cent during the reporting quarter.

The combination of increased discounts and rising gold prices led to a contraction in Titan's earnings before interest and tax margin, declining to 11.1 per cent from 12 per cent.

Titan reported a profit of Rs 786 crore for the quarter ended March 31, marking a 7.1 per cent increase from the previous year but falling short of analysts' expectations of Rs 799 crore.

Ahead of the results, Titan's shares ended approximately 1 per cent lower. Year-to-date, the stock has declined by nearly 4 per cent, compared to a 3 per cent increase in the benchmark Nifty 50 index.

(With Reuters inputs)

Updated 19:14 IST, May 3rd 2024