Titan Q2 Result preview- Jewellery segment is likely to drive revenue growth, margins may see some moderation
Titan Company is expected to report strong September quarter performance largely driven robust growth momentum in the Jewellery segment. Watches and wearables are also expected to be strong growth drivers while other Emerging businesses are shaping well and EyeCare sees a double-digit growth helped by international brands. Also read- V -Guard Q2 review: Sunflame integration, consumer durable growth key drivers. H2 growth may be stronger feels the CFO The analysts at Kotak Institutional Equities anticipate 27% year-on-year growth in Titan's recurring jewelry sales, with an EBIT margin of 12.5% .
Some softness in gold prices since June and stability thereafter for the last three months helped domestic demand, they said. However, the Jewellery EBIT is to decline about 80 basis points yar-on-year (despite cut in franchise commissions) on account of rationalization of gold rate mark-up, aggressive exchange offers, slightly higher-than-usual studded activation schemes and strong growth in South (low-margin market) said analysts at Kotak. Anushi Vakharia, Research Analyst, StoxBox also expects about 60 basis point moderation in margins on a annual basis due to an increase in brand-building investments and uptick in consumer offers.
However she expects margins to expand sequentially, with the company’s focus on promoting its studded business which has a higher ticket share. Watches are pegged to report a 15% year-on-year growth while eyewear is likely to see 25% yoy growth aided by store growth as per Kotak analysts. They estimate 12.5% EBIT margin for watches, and 15% EBIT margin for eyewear in 2QFY24.
EBIT stands for Earnings before interest and Tax. Titan’s revenues are estimated to grow at 19% to ₹10369.2 crore. Net profit
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