(Reuters) -Indian jeweller and watchmaker Titan reported a largely flat third-quarter profit on Tuesday, but still topped estimates as customers looked past high gold prices to splurge on ornaments during the festive season.
The company reported a profit of 10.47 billion rupees ($120.23 million) in the quarter ended Dec. 31, compared to 10.53 billion rupees a year ago.
Analysts, on average, had expected a profit of 9.86 billion rupees, according to data compiled by LSEG.
Indian brands record higher sales during the festive period, which coincides with the fiscal third quarter, as consumers scramble to buy everything from clothes to jewellery.
The company sales grew about 26% to 175.5 billion rupees.
Titan’s mainstay jewellery business, which houses the Tanishq and Mia brands and accounts for the majority of revenue, reported a 26% growth. The company in a statement said it was the “strongest quarter” for this segment.
“The festive quarter brought consumer cheer,” Titan said.
Large jewellers have weathered a broader consumption slowdown despite high gold prices as India, the world’s second-biggest gold consumer, treats bullion as an investment.
Domestic gold prices touched a then-record high of 79,775 rupees ($916.14) per 10 grams in October, before falling in November and bouncing back again in December.
The profit was largely flat despite sales growth as Titan had bought gold worth billions of rupees well ahead of India’s move to cut import duties on gold in July 2024.
It then had to sell the gold it had purchased at higher costs for lower prices.
That led to its net profit margin shrinking to 5.9% for the December quarter, from 7.43% a year earlier. However, this was a sharp uptick from 4.84% in the previous quarter.
The company has now absorbed the full impact of losses from the gold import tax cut, Managing Director CK Venkataraman said.
($1 = 87.0800 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai; Editing by Varun H K)
