Watches and accessories maker Titan Co reported an 8.34 percent growth in consolidated profit during the July-September quarter. Subbu Subramaniam, CFO of Titan, spoke to CNBC-TV18 about the earnings growth and the company’s business plans going forward.
“The company is growing faster than the industry each quarter,” said Subramaniam.
“The company is now seeing the benefits of ad spends on jewellery in the third quarter,” said Subramaniam, adding that going forward in the second half, the ad spends would be lower. “It was part of the plan to incur higher ad spends in the first half and therefore expected margins to be lower,” he said.
In terms of sales, Subramaniam said, “The company had a very good run up to Diwali, saw 27 percent growth and the retail-end in the first 29 days upto Diwali. Therefore, market share gains continue.”
With regards to the watch business, he said,” The company would spend more on ads in the second half and so expect the EBIT for that business to be in between 15-16 percent for FY19. For the second half, the EBIT margins would be around 12-13 percent in second half because of ad spends.”
“Eyeware is small part of the overall business but it saw a good growth in October. The focus here is more on growing topline, increase network rather than look at profitability,” said Subramaniam.
With regards to IL&FS exposure, he said, “It would be difficult to predict additional provisioning that would be needed. The company has exposure to IL&FS inter-corporate deposits worth Rs 145 crore.”