Titan Company Ltd. witnessed a "drastic slowdown" for a few days after Prime Minister Narendra Modi's announcement to demonetise Rs 500 and Rs 1,000 currency notes, but a recovery in its modern retail and dedicated retail channels was clearly visible within a few days, the company said on Tuesday.
Titan's performance in the October-December quarter was lifted by a 15 percent retail growth in its jewellery brand, Tanishq, the company said in a stock exchange filing.
The Tanishq brand saw sales growth of 40 percent during the festive period in October. The company calls it one of their best festive seasons in the last few years.
The brand saw an “abnormally high rush of buyers” at its stores on the day demonetisation was announced. After a brief period of sales slowdown, Tanishq's average daily sales were close to the average daily sales before the demonetisation.
This trend was visible till the end of December and is possibly due to a strong wedding season and closure of a number of smaller jewelers across the country.Titan's Stock Exchange Filing
It added that Tanishq's revenues have grown reasonably “despite the base effect due to the studded-jewellery activation started in the third quarter of the last financial year, and the impact of demonetisation”.
The company said that almost all of its sales were either through its Gold Harvest scheme – where customers had paid advances for custom jewellery before demonetisation – or through digital modes of payment.
Not A Good Time?
The watches division, which houses the World of Titan and Fastrack brands, saw single-digit retail growth for the quarter despite a good festival season, the filing said.
Sales in the watches segment is yet to recover as most transactions are done on a cash basis, it added.
...the trade channel is expected to take another 2-3 more months to recover.Titan's Stock Exchange Filing
The WOT and Fastrack brands contribute around 50 percent to the sales of Titan's watches division.
Impaired Visibility
In the eye wear segment, the prescription eye wear business has done well during the quarter, however, sunglasses business "is struggling to maintain its share" which is "pulling down the overall growth".
"Industry growth continues to remain a concern for the division," the company said.
It has undertaken the closure of its Spexx stores in wake of the slowdown in industry growth.
...the division is also undertaking closure of its Spexx format stores which is eroding the revenue growth to some extent. The division has closed 11 Spexx stores YTD December 2016.Titan's Stock Exchange Filing
The company expects the eye wear segment to grow strongly, at some point, and the division is gearing up for that through geographical expansion and planned entry in the e-commerce space, the filing said.
The precision engineering division, according to the filing, continues to grow well while it awaits regulatory approval for demerger into a separate fully-owned subsidiary.
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