Titan glitters in Q3, beating all the odds
₹11,700 crore, led by 21% domestic growth. This is the third consecutive quarter of more than 20% growth. Plain gold jewellery and coins grew faster than studded pieces.
Standalone jewellery EBIT (earnings before interest and tax) margin will be flat year-on-year at 13% thanks to the impact of lower studded sales and higher consumer offers. Consolidated net sales should grow by 25% year-on-year in Q3. The management said this was down to exchange programmes and other offers to lure consumers.
Along with the rationalisation of gold rate mark-ups, this will squeeze margins. But better operating leverage and lower franchisee commissions have helped maintain them. The watches and wearables business grew by around 23% year-on-year, but eyewear clocked a 3% decline.
The fragrances and fashion accessories segment also declined by 9% year-on-year. But Taneira’s sales (women’s ethnic wear) grew 61% year-on-year in the wedding season and the brand opened 11 new exclusive stores. There was also 31% growth in CaratLane (everyday jewellery), driven by new collections, wedding gifting, and a mangalsutra campaign.
CaratLane also added 16 new domestic stores. Titan first established its reputation as a jeweller with its guarantee of testable purity for Tanishq jewellery. It has steadily moved to occupy different price points through brand extensions.
The company also has excellent bullion sourcing and inventory management, apart from cutting-edge designs. Its long-term prospects remain excellent. While it is the largest organised player in jewellery, it holds only an estimated 7% of the market, which is still dominated by unorganised jewellers.
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