Net sales increased to Rs 442.06 crore from Rs 408.51 crore last year. The company press release said that domestic demand for horological products was sluggish and export earnings had dropped.

Volumes growth for watches in the domestic market was about 15 per cent, resulting in increased market share. Jewellery sales climbed to Rs 60 crore after the launch of 22 karat gold jewellery in June 1997.

Exports were negatively impacted by the value of the rupee, cuts in export benefits, the economic situation in South East Asia, the mass deportations of Asians in Middle East countries and the need for a reassessment of the company's strategy in Europe, the company said.

It added that imports were also curtailed and the company became a net foreign exchange earner on the revenue account for the first time. In view of the marginaldecline in operating profit and the absence this year of any extraordinary profit as in the previous year, the board of Titan Industries has trimmed the dividend from Rs 3.3 per share to Rs 2.5 per share.

Interest charges were lower at Rs 52.95 crore against Rs 56.39 crore. Depreciation was higher at Rs 18.81 crore as against Rs 16.51 crore. Provision for taxation dropped to Rs 1.6 crore from Rs 3.58 crore last year.

"In paying out a total amount of Rs 11.63 crore by way of equity dividend, Titan has elected to dip into its previously accumulated surplus to the extent of Rs 1.51 crore," the company said. Titan Industries has estimated around 17 per cent increase in sales during the current quarter.