Indian jeweller and watchmaker Titan reported a 52.5% rise in first-quarter profit on Thursday, benefiting from higher gold prices, even as budget-conscious consumers traded down to low-carat, lightweight designs.
Titan, home to the Tanishq and CaratLane jewellery brands, posted a profit of 10.91 billion rupees (nearly $125 million) for the quarter, compared with a profit of 7.15 billion rupees a year earlier.
Spot gold prices rose 5.5% in the quarter, continuing its bullish run fuelled by investor flight to safe-haven assets due, in part, to U.S. trade jitters and tensions in the Middle East.
Overall, the company’s revenue rose 21% to 148.14 billion rupees.
Though there was no improvement in the number of customers, like-for-like domestic sales growth was still in the “double digits”, Titan had said in July, citing steeper prices as consumers bought investment-grade gold coins and turned to lower-carat gold jewellery.
“Consumer confidence in gold as both adornment and store of value remains intact,” Managing Director CK Venkataraman said in a statement.
Overall sales in Titan’s jewellery business, which includes its Zoya and Mia brands and accounts for 88% of total revenue, climbed 19% in the reported quarter.
Titan’s EBIT (earnings before interest and tax) margin improved to 11.8% from 9.8% a year ago.
The jeweller’s finance chief had told Reuters in February that if gold prices continued to rally, Titan’s core earnings margin target of 11%-11.5% could be under threat.
Revenue in Titan’s second-largest segment, watches, rose 24%, as affluent customers opted for premium timepieces.
The company is considering setting up a manufacturing base in the Gulf region to retain low-tariff access to the U.S. market, where it has been steadily expanding in recent years, Managing Director C.K. Venkataraman told Reuters on Tuesday.
