Titan Company Ltd. on Monday reported a net loss of ₹270 crore (standalone) for Q1 of financial year 2021 versus a profit of ₹371 crore during the corresponding period of the previous year.
The disruption caused by the COVID-19 pandemic in India affected the performance of Titan severely with retail outlets closed for a major part of the quarter, resulting in a decline in income of 62% for the first quarter of financial year 2020-21 with the total income declining to ₹1,901 crore. Revenue included sale of bullion worth ₹ 601 crore done to reduce the inventory given the low level of sales due to the disruptions in activities, a statement from Titan said on Monday.
The lockdowns impacted the Company’s operations significantly during April and May 2020 as most stores were forced to shut down. While stores started opening in May, post Unlock 1.0, even as at the end of June 2020, only 83% of the stores opened and even for stores that opened, many were not operating all days.
The recovery rate of revenue started improving slowly and as of June it was 21% for the watches and wearables division, 77% for the jewellery division and 25% for the eyewear division.
As per the company, consumer sentiment was impacted severely due to the economic downturn, people being forced to remain indoors for extended periods of time as most people worked from home and the perceived risk of going out to public spaces. Further with most weddings in the quarter being postponed, demand for wedding jewellery was affected.
“With the negative consumer sentiment prevailing in the quarter, discretionary spends were low, and specifically impacted our watches business and diamond-studded jewellery in the jewellery business,” the statement added. Plain gold jewellery sales, however, recovered better than expected in June despite high gold prices.
