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