Earnings Outlook
Festival demand to boost Titan Oct-Dec revenue, PAT
This story was originally published at 10:42 IST on 31 January 2025
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By Narayana Krishna
HYDERABAD - Strong growth across business segments is likely to help retail major Titan Co. Ltd. report healthy numbers for the December quarter. Robust consumer traction during Diwali likely boosted the jewellery business growth. The watches and wearable segment, too, is likely to see higher double-digit growth for the quarter, according to analysts.
Tata group's flagship retail company is expected to report a nearly 4% on-year rise in its Oct-Dec net profit to INR 10.8 billion, while its revenue is seen up 31% on year at INR 170.7 billion, according to the average of estimates from eight brokerages. Sequentially, net profit is seen up 53% and revenue is seen growing 29%.
In a quarterly business update to the stock exchanges on Jan. 6, Titan said its revenue for the December quarter rose 24% on year. It also said the jewellery division business rose 26% on-year, led by festival demand, while watches and wearables grew 15%. The EyeCare division registered 18% growth, Titan said.
Analysts' estimates for the company's Oct-Dec net profit ranged from INR 9.4 billion, the lowest by HDFC Securities Ltd., to INR 12.2 billion, the highest by Prabhudas Liladher Pvt. Ltd. Revenue projections ranged from INR 159.6 billion by Kotak Institutional Equities to INR 183.9 billion by Motilal Oswal. The company is scheduled to announce its Oct-Dec earnings Tuesday.
The projections by brokerages, including Emkay Global, Motilal Oswal and HDFC Securities, were mostly in line with the company's business update on revenue growth, while projecting double-digit growth in profit sequentially. However, analysts expect a decline in Titan's earnings before interest, tax, depreciation and amortisation, or EBITDA, margins due to inventory loss and weak margins in the studded jewellery business.
Motilal Oswal and Nuvama Wealth Management Ltd. said Titan may report a one-time inventory loss of INR 2 billion-INR 2.5 billion for the quarter due to reduction in customs duty on gold, which may impact margins. Nuvama Wealth sees Titan's December quarter EBITDA margin at 10%, against 11.2% a year ago.
Titan's Oct-Dec EBITDA is pegged at INR 16.9 billion, as per an average of estimates from seven brokerages. The lowest projection was INR 15.7 billion and the highest was INR 18.5 billion. When the company announces its results, market participants will look for commentary on the volume growth outlook and market share gains in the south Indian market. At 1040 IST, shares of Titan traded at INR 3,496, up 3.7%, on the National Stock Exchange.
Following are the Oct-Dec earnings estimates for Titan based on reports from eight brokerages in descending order by the estimate of net profit:
|
Brokerage name |
Net Sales |
Net Profit |
EBITDA |
|
-------(In INR million)------- |
|||
|
Prabhudas Lilladher Pvt Ltd |
1,62,497.00 |
12,224.00 |
18,444.00 |
|
Motilal Oswal Financial Services Ltd |
1,83,997.00 |
12,164.00 |
18,542.00 |
|
Sharekhan Ltd |
1,78,460.00 |
11,760.00 |
-- |
|
JM Financial Institutional Securities Pvt Ltd |
1,61,723.00 |
10,577.00 |
16,052.00 |
|
Kotak Institutional Equities |
1,59,585.00 |
10,334.00 |
18,193.00 |
|
Nuvama Wealth Management Ltd |
1,61,683.00 |
10,232.00 |
16,217.00 |
|
Emkay Global Financial Services Ltd |
1,79,803.00 |
9,439.00 |
15,655.00 |
|
HDFC Securities Ltd |
1,77,700.00 |
9,400.00 |
15,700.00 |
|
Average |
1,70,681.00 |
10,766.25 |
16,971.86 |
End
End
US$1 = INR 86.64
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Namrata Rao
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