Titan opens 1.47 per cent lower today after announcing Q2FY21 results
Titan Company Limited reported its Q2FY21 results on Wednesday. The main revenue contributor of the company is its jewellery segment.
Hence, the streets always give heavy weightage for this segment’s performance. Its jewellery segment saw a reduction of 2.31 per cent in revenue from Rs 3,528 crore in Q2FY20 to Rs 3,446 crore this year. These numbers are excluding the bullion sales of Rs 391 crore.
The company also saw a reduction in the studded segment with the studded ratio being at 26 per cent this quarter as against 38 per cent during the previous year. This year saw more consumers preferring lower margin plain segment jewellery and gold coins owing to perhaps higher gold prices. The sale of coins was around 14 per cent of the total sales as compared to only 3 per cent last year. This has hit the company margins negatively. Thereby, the EBIT/total income ratio for jewellery has reduced from around 10 per cent in Q2FY20 to 8.2 per cent in Q2FY21.
Apart from this, Titan witnessed a reduction in advertising expenses of around 60 per cent due to lower economic activities and thereby, less aggressive ad campaigning.
The stock market reacted in line with the revenue reduction in the jewellery segment and opened at Rs 1,199.95 or 1.47 per cent lower today.