(Reuters) -Indian jeweller and watchmaker Titan reported second-quarter profit above estimates on Monday, as a steep rise in gold prices lifted the firm’s bottom line.
Titan, home to Tanishq and CaratLane jewellery brands, said profit rose 59% to 11.20 billion rupees ($127.4 million) in the quarter ended September 30.
On average, analysts had estimated a profit of 10.28 billion rupees, according to data compiled by LSEG.
Spot gold prices rose 16.4% in the second quarter, as investors took refuge in the bullion’s safe-haven status at a time when U.S. President Donald Trump’s shifting trade policies battered sentiment.
As a result, price per transaction rose for Titan even as it saw a marginal decline in buyer counts in its Tanishq, Mia and Zoya portfolio in India, the firm said in a quarterly business update.
Titan’s jewellery business accounts for nearly 88% of its revenue, which rose nearly 30% to 165.22 billion rupees in the quarter.
Although rising bullion prices and steeper price tags dampened demand, Indian consumers, who have long valued gold as an investment, have been turning to lower carat and lightweight jewellery.
Indians have also been investing more in gold coins for the past few quarters, which has lifted Titan’s sales but pressured its margins, as coins carry a lower profit margin.
Titan’s core profit margins improved by 211 basis points to 10.8% from a year ago, but further upside was capped by higher gold coin sales, while lower margins on studded jewellery also weighed.
Revenue in Titan’s second-largest watches business grew 13.3%, benefitting from sustained demand from the country’s affluent for premium timepieces.
($1 = 87.8950 Indian rupees)
(Reporting by Ananta Agarwal, Anuran Sadhu and Meenakshi Maidas in Bengaluru; Editing by Janane Venkatraman and Shreya Biswas)
