Titan Company (TITAN) Q4 93/94 earnings summary

Executive summary

• Sales income rose 18% and profit increased over 75%, supported by indigenisation savings, improved operating efficiency and higher sales realisations.

• Domestic sales and exports grew despite an approximately 18% decline in sales by India’s four main watch producers.

Financial highlights

• Income was Rs. 22,880.78 lakhs vs Rs. 19,281.30 lakhs; sales were Rs. 22,622.69 lakhs vs Rs. 19,121.45 lakhs.

• Profit before tax and profit after tax were each Rs. 1,908.88 lakhs vs Rs. 1,087.21 lakhs; prior-year provision for taxes was Rs. 4.82 lakhs.

• Gross profit was Rs. 4,503.14 lakhs vs Rs. 3,656.16 lakhs; interest was Rs. 1,615.93 lakhs vs Rs. 1,846.19 lakhs; depreciation was Rs. 978.33 lakhs vs Rs. 722.76 lakhs.

• Proposed dividend increased to 25%; appropriation included Rs. 1,056.91 lakhs for dividend and Rs. 200 lakhs transferred to general reserve.

Outlook and guidance

• FY94-95 sales income was projected at Rs. 350 crores; at full capacity across watch, clock and jewellery plants, sales income was targeted at Rs. 700 crores, including exports of Rs. 250 crores, within ~3 years.

• Production was expected to reach close to 3.30 million watches in FY94-95; watch capacity was planned to rise to 4 million by FY95-96.

• Export priorities included strengthening the Middle East business and expanding into Asia, Africa and Continental Europe; exports were expected to exceed CIF imports on the revenue account in FY94-95.

• New European- and American-market watches were expected to launch by September 1994; table-clock manufacturing facilities were also planned.