Titan continued to show the signs of turnaround as the Indian watches major posted a healthy growth of 13% in the topline for 2QFY04. However, the bottomline grew at a faster rate. Both operating and net profit margins of the company improved significantly.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (m)
Diluted Earnings per share*
The performance looks stronger on half yearly basis as the topline grew by 19% and company reduced its losses by 85% as compared to same period last year. Growth in the topline came from both watches and jewelry segment as is evident from the table below. Excluding Rs 10 m as charges towards VRS, operating margins have shown a 220 basis points growth for 2QFY04. This is a commendable performance and highlights the steps taken by the company to become profitable.
Lets have a look at the segmental break-up of the company’s performance.
Watches & Clocks
A growth of 24% in watches & clock segment compensated for the marginal dip in the revenues from jewelry segment for the September quarter. Marginal dip in revenues from jewelry is due to seasonal reasons. Sale for the jewelry segment is likely to pick-up during the second half as the festival and marriage season approaches. However, the PBIT margins for jewelry segment improved by around 400 basis points during the first half.
As far as future growth prospects are concerned, Titan has been talking about capital infusion required to restructure business and reduce high cost debts. Lack of funds has been hampering the company's ability to reinvest in the business for future growth in the last two years (debt equity ratio is at a concerning level of 2.4 times). If cash infusion comes in, Titan will not only be able to reduce interest charges but also restructure its working capital to unlock cash.
At the current price level of Rs 116, the stock trades at P/E multiple of 19.7annualised 2QFY04 earnings. However, the first half is not the true representation of the annual performance because the sales and profit are skewed to second half as marriage and festival season starts from October onwards.
More Views on News
Sorry! There are no related views on news for this company/sector.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407