Titan Company (TITAN) Q4 87/88 earnings summary

Executive summary

• First full year of operations: income Rs 19.13 crore, sales of 3.44 lakh watches; positioned as India’s leading quartz analog watch producer.

• Profit after tax was Rs 26.11 lakh; directors did not recommend a dividend, citing limited profits.

• Indigenisation exceeded the government-approved phased manufacturing programme, with most components being produced at Hosur by the report date.

Financial highlights

• Sales were Rs 1,679.62 lakh and other income Rs 232.93 lakh; total income was Rs 1,912.55 lakh for FY 1987-88.

• Profit before depreciation and interest was Rs 251.31 lakh; depreciation Rs 84.80 lakh and interest Rs 136.40 lakh resulted in profit before tax of Rs 30.11 lakh.

• Tax provision was Rs 4.00 lakh; profit after tax was Rs 26.11 lakh, versus a Rs 5.04 lakh loss after tax in 1986-87.

• Operating and other expenses were Rs 1,661.24 lakh; interest included Rs 111.28 lakh on fixed loans and debentures.

Outlook and guidance

• Management expected substantially higher watch sales in 1988-89; sales network expansion was planned, alongside further range additions and product improvements.

• Case Project, estimated at Rs 22 crore, was expected to begin operations in mid-1989; planned benefits included more flexibility, improved quality, lower costs and fewer supply constraints.

• Profitability outlook remained partly dependent on government policies, including timely import licences and duties on cases and dials.