Titan feeling the GST heat, likely to report Rs 300 crore loss in next quarter

By

Maverick Martins

Published
Oct 1, 2017

Tata group firm Titan Ltd sales have plummeted post GST which is likely to cost the company a loss of Rs 250-300 crore (approx $39 million-$46 million) during the current quarter for the financial year.
 

Titan has registered a growth of 42 per cent in revenue and a 110 per cent growth in Profit before Tax in the first quarter. The sales income had grown from Rs 2769.55 crore (approx $434 million) last year to Rs 3944.49 crore (approx $620 million) in the first quarter of the financial year.
 
"This year we had the disruption due to the introduction of the GST regime as well. July sales for at least the first half were clearly impacted by the advanced sales in the previous quarter (estimated at Rs 250-300 crore) due to onset of GST”, the company said in a BSE filing.

During the quarter, its jewellery division was also impacted from the applicability of the Prevention of Money Laundering Act to the jewellery business, the company said.
 
Although, the company has started complying to it, however, it said that it needs to be amended as the PMLA rules for the jewellery segment, as they are meant to apply for the banking and financial services sector.
 
"This would mean that the store would need to collect KYC for all sales in excess of Rs 50,000 and would be subject to filing certain returns as applicable," it said.
 
While, in the eye wear segment, its Titan Eye Plus retail format continues to show healthy growth in Q2/FY 2017-18 and has added 21 stores during the period, it said. It will also be adding around 470 Titan EyePlus stores in the current financial year.
 
Titan is expecting its eyewear business to post better margins in the next financial year after its new frame manufacturing facility starts commercial production from January 2018.
 
Titan Ltd is India’s leading luxury goods firm owned by the Tata group and has over 1,397 stores across India.