Titan Co. Ltd, in a filing with the stock exchange (BSE) last week, said that the overall sales growth in the July-Sept quarter (Q2) was expected to be fairly good and close to expectations, despite some impact (in July) of the implementation of Goods and Services Tax (GST), and of the new KYC norms under the Prevention of Money Laundering Act (PMLA), which made it mandatory to collect identity proof and related data for all sales over Rs 50,000.

The Company said that it continued to gain jewellery market share during this period, which is usually considered to be a comparably weaker quarter due to lack of festivals and certain inauspicious periods. It stated that this year, sales in the quarter were additionally hit by consumers advancing some purchases to the second half of June in anticipation of the GST which was implemented from July 1, 2017.

Titan clarified that subsequently disruptions on account of GST implementation at the consumer level had been extremely rare and stock levels at frachisees and the trade are almost back to the pre-GST levels.

While stating that it has been complying with the new KYC norms for sales above Rs 50,000, the Company pointed out that the current rules were meant for the banking and financial services sector and would need to be amended specifically for the jewellery sector. Pointing out that the threshold is very low considering the price of gold, and that laundering, if any, would not be resorted to at such low price points, it added that government had already made PAN cards mandatory for purchases over Rs 2 lakh, and that cash purchases above this amount have in any case been banned.

Key developments in the quarter included a diamond studded ‘activation’ campaign, where response was a little below expectations; the launch of two major collections, Padmavati, in association with the release of the eponymous Bollywood multi-starrer, and Jewels of Royalty, a high value diamond studded collection; as well as the addition of a net of 4 Tanishq stores, which is on the lower side due to the planned phasing out of its Goldplus stores (18 were closed) and the time lag in opening new Tanishq stores in their place.

Besides the jewellery segment, which accounts for over 75% of the business, Titan said that it expects good results from the eyewear and watch divisions too.