India's Tata-owned Titan reports smaller-than-expected profit as gold prices hurt

BENGALURU, Aug 2 (Reuters) - Indias Tata Group-owned Titan Co (TITN.NS) reported a lower-than-expected first-quarter profit on Wednesday as its mainstay jewellery segment as surging gold prices pushed up costs and dented revenue growth.

Titan, which owns the Tanishq jewellery brand, said its profit fell more than 2% to 7.77 billion rupees ($94.1 million) in the three months ended June 30.

Analysts had expected profit of 9.50 billion rupees, per Refinitiv data.

Gold prices hit record highs during April-June, dampening demand in the larger Indian market, exacerbating Titans spending on raw materials, which surged nearly 48% from a year ago.

Expenses climbed nearly 29%, outweighing a nearly 19% jump in sales to 101.03 billion rupees, and ate into margins.

Titans margins on earnings before interest and taxes (EBIT) contracted to 10.7% in the April-June quarter from 13% a year ago.

The jump in sales was on the back of increased buying of gold in April as consumers celebrated the annual festival of Akshaya Tritiya when buying the yellow metal is considered auspicious, while wedding purchases boosted volumes in June.

The jewellery division accounts for 89% of Titans total income.

Smaller rival Tribhovandas Bhimji Zaveri (TBZL.NS) posted a five-fold jump in quarterly profit on Tuesday.

Shares of Titan had risen 21.2% in April-June, outpacing a 10.5% increase in the benchmark Nifty 50 (.NSEI) index.

($1 = 82.5480 Indian rupees)