 "Titan")
India's Titan missed first-quarter profit estimates on Friday as higher gold prices hindered demand in its mainstay jewellery segment.
The Tata group-owned company reported a 5% fall in consolidated profit to Rs 715 crore ($85.4 million) in the quarter ended June 30, from Rs 756 crore an year ago.
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Analysts' on average expected a profit of Rs 765 crore, as per LSEG data.
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Gold prices have been on the rise since the last financial year, dampening demand for jewellery in India, the world's second-largest gold consumer, with many retailers offering significant discounts to attract customers.
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Additionally, fewer wedding days during the quarter, increasing competition from regional players, and heatwaves across the country have also stifled demand for gold jewellery.
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Still, Titan's jewellery business, which houses brands like Tanishq and CaratLane and accounts for 88% of overall revenue, reported a 10% rise in revenue.
ALSO READ:?Titan Company MD C K Venkataraman on his 'sparkling' journey with Tanishq
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ALSO READ:?Titan Company MD C K Venkataraman on his 'sparkling' journey with Tanishq
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The company said domestic growth for jewellery was largely due to higher selling prices, whereas buyer growth was in the low single-digit percentage range.
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Titan's watches and wearables segment, which contributes 8% to the total revenue, reported a 12% growth in revenue.
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While overall sales jumped 13% to Rs 12,223 crore, it grew at its slowest pace in four quarters.
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Meanwhile, raw material costs jumped 43% during the quarter due to high bullion prices, hurting margins.
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As a result, Titan's earnings before interest and tax (EBIT) margin contracted to 9.7% from 10% a year ago.
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The company's shares are down nearly 6% so far this year, compared to a 14% gain in the benchmark Nifty 50 index.
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