Titan’s Jewellery Business Enters Growth Phase On Weddings, Festive Demand

Sales of Titan Co.’s mainstay jewellery business rose over the year earlier in the quarter ended December, helped by resurgence in the festive season and pent-up demand from deferred weddings in the first six months of the fiscal.

The jewellery division crossed from recovery phase to growth phase, while watches, wearables and eyewear divisions moved much closer to full recovery in the October-December quarter, the owner of ‘Tanishq’ brand said in an exchange filing. “The company had been expected a good festive season as customers wanted to feel good by stepping out and shopping after six months of being restricted primarily to their homes. The third quarter didn’t disappoint.”

Also, after creating an international business division last year to bring focus on further exploring and exploiting opportunities outside India, Tanishq opened its first store in Dubai during the reported quarter, and “has got an excellent response from non-resident Indians and other residents in the U.A.E”.

Shares of Titan rose as much as 3.2% in morning trade on Wednesday to Rs 1,621 apiece—an all-time high. But the stock pared most of the gains to trade just over 1%.

Here’s how each segment of the nation’s largest branded jewellery maker fared in the three months ended December…

Jewellery

• The jewellery division has recorded close to 15% year-on-year growth, excluding sale of raw gold of Rs 334 crore, during the quarter.
• The company had already announced 15% growth in the 30-day festive period from Dussera to Diwali. The growth trend was visible even after the festive season ended.
• Titan witnessed an improvement in walk-ins and pick-up of sale in metros, below Rs 1-lakh category and studded segment.
• The studded mix in third quarter improved though still lower than levels seen in the previous year.
• Tanishq continued to see a significantly higher share of gold coin sales and strong growth in wedding jewellery sales.
• Ticket size continues to be higher due to higher gold rates and higher share of wedding-related products, but 100% recovery in buyers (number of invoices) is yet to be seen.

Watches & Wearables

• The watches & wearables division had a recovery rate of around 88% in October-December compared to the revenue of the same quarter a year ago.
• E-commerce channel led recovery with very strong absolute growth of more than 30%.
• The festive period saw a surge in footfall in the shopping zones and the recovery rate improved in metros in the quarter.
• The recovery rate for all retail channels had been steadily increasing month-on-month, primarily due to higher consumers walk-ins and complemented by selling of multiple products or higher ticket size product in a single invoice.
• Omni-channel capability has been scaled up to about 80% of ‘World of Titan’ and Fastrack stores.

Eyewear

• The division had a recovery of about 92% in the quarter compared to the revenue of the same quarter a year earlier.
• ‘Eco lite’ stores requiring lower investment and improving profitability of the franchisees were introduced during the quarter.
• A range of spectacles under ‘Titan Ace’ and Fastrack brands was launched at Rs 999 onwards for value-conscious customers.

Other Businesses

• Other businesses had a revenue recovery of around 80% compared to the revenue of same quarter a year ago.
• Taneira, that sells sarees, opened another store in Mumbai during the quarter gone by, taking the total store count for the business to 14 covering six cities
• The recovery rate for fragrances and accessories continued to be muted due to the slow recovery of two of the biggest channels—trade and large format stores.

Subsidiaries

• Titan Engineering and Automation Ltd. witnessed a decline of 31% in third quarter, with one large order currently in transit.
• Caratlane delivered a growth of 39% for the quarter.