Titan's Q3 Net Profit Rises, Misses Analysts' Estimates | NDTV Profit - video Dailymotion

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#Q3WithNDTVProfit | #Titan's net profit rises for third quarter of fiscal 2024, but misses analysts' estimates.  CFO Ashok Sonthalia discusses performance.

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00:00 Hello and welcome to NDTV Profita, I am Hiral Dhadia.

00:03 One stock that is in focus on the back of earnings is Titan.

00:08 We have seen broad based growth coming in there, a tad miss in terms of margins.

00:11 Joining us on the show is Ashok Sonthalia, CFO at Titan.

00:16 Ashok, good morning and welcome to the show.

00:18 And my first question coming to you is taking all the avenues and parameters into consideration

00:23 of the third quarter.

00:25 Does this give you confidence that the company is on track to achieve the existing jewelry

00:31 revenue guidance of 2.5 times the FY22 revenue by FY27 because that implies a 20% CAGR growth?

00:40 Yeah, I think after FY22, first two years have been going pretty well.

00:47 Actually we are ahead of our required CAGR rate and that gives us confidence that FY27

00:54 guidance is intact.

00:57 And it is more, you know, what we need to do, of course, we are doing, but I think India

01:03 macro consumption story is also supporting this belief that we should be delivering FY27

01:10 2.5x of jewelry revenue.

01:13 Right.

01:14 Ashok, sales in terms of eye care, ethnic wear and perfume, they have been facing challenges

01:19 this time around.

01:20 What's the trajectory looking like?

01:22 Well, opportunity is there, but of course, there are difficult market conditions.

01:29 And if you look at even quarter three, you know, across industries, the behavior of consumer

01:35 and behavior of segments are very, very different.

01:39 While we saw jewelry and watches doing extremely well, eye care, fragrances, et cetera, faced

01:47 a lot more competition, a lot more subdued demand industry wide.

01:52 It's not that in eye care we feared what we did, what we believe most of the players have

02:00 been kind of witnessing that kind of trajectory.

02:04 But yes, there is a lot more work to do for us going forward.

02:08 And we are working on that.

02:10 In fragrances, I think we are expanding our portfolio.

02:13 There are explosive growth on the lower price band and then the higher price band.

02:19 So we are kind of expanding our eskimo perfume portfolio.

02:24 We will see some more action in quarter four, quarter one and quarter two of the next financial

02:30 year.

02:31 So we are hopeful that these businesses also will claim back their rightful growth trajectory.

02:38 Right.

02:39 So with that said and done, if you have to look at FY24 to FY26, do you think a 15 to

02:48 18 percent CAGR growth and a margin in the range of 11 to 12 percent is going to be a

02:54 possibility, a long range I'm giving you, because I am looking at not only the jewelry

02:59 business, but the recovery in the non-jewelry segments as well.

03:03 So no, I think there is a distinct confidence and possibility to the numbers which you spoke

03:08 about that we will be delivering.

03:11 And jewelry actually is a predominant part of our portfolio.

03:16 And as long as jewelry is behaving well, which it is doing and it is showing different characteristics

03:22 from the other consumption category because of the various angles of the investment value

03:29 and many, many more things.

03:33 And if that continues to deliver as a company, we are certainly going to deliver the bands

03:39 which you spoke about.

03:41 Right.

03:42 And very lastly, with regards to the studded ratio as well, that is also seeing a gradual

03:48 recovery.

03:49 Right.

03:50 So do you think that will help you improve the gross margins in the future?

03:55 So the studded ratio in this quarter was 2 percent below than last year.

04:02 And quarter four, you know, is typically a studded activation quarter for us.

04:07 So quarter four performance would be crucial, which we will know in the next couple of months

04:13 that how things are.

04:14 January seems to be doing OK and recovery in studded is happening.

04:21 But we will have to still wait for another two months to have the full quarter four picture

04:26 before we can say with confidence that, yes, studded is getting back to its old mix.

04:33 And from there, it should slightly improve.

04:38 And you know, like the other businesses, if in the portfolio like watches, eye care, they

04:43 do, then they are typically high margin business for us, high operating leverage business for

04:49 us.

04:50 So the portfolio mix also should help us improve margin.

04:54 But all these things will have we will have to wait and watch how different segments are

04:59 doing.

05:00 But as coming back to the number, mid-team to above mid-team kind of growth and the sustainable,

05:08 consistent, stable margin profile, I think that is very much deliverable by us for the

05:13 next two, three months.

05:14 Right.

05:15 I think that's one of the best trajectories that one is watching out for as well.

05:18 Thank you, Ashok, so much for joining us on the show at NDTV Profit.

05:21 We're completely running out of time, taking into consideration all the budget conversations

05:25 that we are having.

05:26 We'll be happy to speak to you at length as well to understand more details with regards

05:32 to strategy going ahead.

05:33 So that's the management of Titan clearly indicating their growth trajectory and outlook

05:39 over the next two to three years.

05:41 Completely out of time with that.

05:42 It's a wrap on this edition on NDTV Profit.

05:44 Thanks.

05:45 Thanks.

05:46 Bye.

05:46 (dramatic music)

05:49 (gentle music)

Titan's Q3 Net Profit Rises, Misses Analysts' Estimates | NDTV Profit

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