The December 2010 quarter turned quite the shining one for Titan Industries, retailer of watches, jewellery and eyewear, with a good 47 per cent growth in revenues.

Cost savings in raw material, interest and depreciation spurred a massive 82 per cent net profit growth. Growth in sales from stores open for more than one year was a good 18 per cent.

The company's massive reach – over 10,000 dealers and 624 owned stores — allows it to tap a far wider market than most peers. The jewellery segment benefited from a bumper festival season, notching a 50 per cent growth in revenues.

As consumer preferences turned to diamonds from gold in the light of surging prices of the latter, the nascent diamond offerings of the company accounted for almost a quarter of the sales.

The higher margins offered by diamond jewellery helped this segment improve operating margins to 9 per cent, from the 7 per cent in the December 2009 quarter.

The watches segment clocked a relatively lower 35 per cent growth in revenues. However it offered higher margins which touched 18 per cent in the December ‘10 quarter, against the 15 per cent in the same quarter in 2009.

Margins improve

The good show put up by watches and jewellery, largely allowed Titan to take in its stride the continued under-performance of the eyewear and precision engineering business.

While revenue growth from the latter two segments was strong at 37 per cent, they suffered losses in this quarter as well. The company expects this segment to break even by the end of the fiscal.

Still, the company's overall operating margins improved to 10 per cent for the December quarter, from the 8 per cent in the same period in 2009.

Input costs dropped to 63 per cent of revenues in the December ‘10 quarter from the 68 per cent in the same quarter in 2009.

This helped offset a 48 per cent jump in advertising costs, as the company stepped up campaigns in both domestic and overseas markets.

Net margins also increased to 7 per cent from the earlier 6 per cent.

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