Titan Company, India’s biggest jewellery retailer which caters to the luxury and mid-market segments with its brands Zoya, Tanishq, Mia and CaratLane, reported an outstanding festive quarter on the back of strong growth in the studded and plain jewellery category.
Titan’s jewellery business recorded a sales growth of 37% to R4,890 crore in the third fiscal quarter that ended December 31st, 2018, compared with R3,576 crore in the third quarter of 2017.
For the nine months that ended December 31st, 2018, the jewellery division recorded a sales growth of 24% to R12,044 crore.
On a year-on-year basis, the jewellery division’s profit before finance costs and taxes shot up 69% to R650 crore in the third quarter, and grew 32% to R1,435 crore in the April-December 2018 period.
“The jewellery division continued to witness strong samestore growth, reflecting continuing market share gains. Expansion of the store network continued as planned to benefit from the rising aspirations of the consumers in middle India to shop from the leading brands. Customer demand was buoyant in the festive season of Diwali-Dussehra. We expect the full year growth in jewellery business to be around 22%,” Titan stated.
In a presentation, Titan noted that the plain category also benefited from a large institutional order of R200 crore of gold coins. CaratLane, its 67% owned subsidiary, recorded a 43% revenue growth in the third quarter primarily due to network expansion.
The company said the Utsav collection, based on heritage and antique gold jewellery, was launched in October 2018 and has been receiving good customer response. The peacock-inspired Preen collection was launched in the “party diamonds category”. In the men’s segment, Aveer collection was launched at the end of the last quarter.
Titan’s jewellery retail network includes three Zoya stores (15,000 sq ft), 277 Tanishq stores (1.07 million sq ft), 48 Mia stores (11,000 sq ft), and 50 CaratLane stores (34,000 sq ft).
In the year to date, the jewellery division added 27 Tanishq stores and closed three, with the net retail space addition being approximately 65,000 sq ft.
Total growth
Titan continued good growth momentum across all its businesses in the seasonally strong third quarter, demonstrating the inherent strength of virtually all the brands in its portfolio and the strong connect with consumers.
Overall, Titan Company reported an extremely impressive growth of 42% in profit after tax for the quarter ending December 2018. Sales during the threemonth period grew by 35%, and increased 23% for the nine-month period.
The overall standalone income from operations in the third quarter, October to December 2018, was R5,632 crore, as compared to last year’s income of R4,174 crore during the same period. The income for April to December 2018 stands at R14,254 crore.
The company’s net profit was R416 crore for the third quarter, and R1,080 crore for the ninemonths ended December 2018.
Titan recorded a 19% increase in watch sales to R641 crore in the third quarter, but noted that the growth appears inflated and was not comparable because the income last year was post a higher GST rate. The watch division’s third quarter real growth at net consumer prices is 12%.
Titan Company’s total retail chain is 1,574 stores strong, as of December 31st, 2018, with the retail area touching 2.02 million sq ft nationally for all its brands. A total of 140 stores were added by Titan’s brands in the nine-month period till December 2018.
Bhaskar Bhat, managing director of the company, stated, “The festive quarter of 2018-19 turned out to be one of the best quarters for jewellery as well as for other businesses – watches and eyewear. All our new product launches like ‘Utsava’ and ‘Preen’ in jewellery and the ‘Grandmaster, Reflex Wav, Raga I Am’ in watches have received a very good response. The top-line growth of 35% for the company in the third quarter was driven by these new introductions, some successful activations as well as measured network expansion. Our retail network across businesses has now crossed the 2 million sq ft mark. This momentum is expected to continue and help us achieve our annual targets.”
Succession plan
In a separate statement, Titan Company’s board of directors announced that Bhaskar Bhat, current managing director, will retire from the services of the company on September 30th, 2019, on attaining the age of superannuation as per the Tata Group’s retirement policy. Bhat had joined Titan in 1987 and led the company through the last 17 years, during which time the turnover of the company has grown from around R700 crore to R15,000 crore-plus and attaining a market capitalisation of $12 billion.
The board said that C.K. Venkataraman, currently the CEO of the company’s jewellery division, will succeed Bhat as managing director with effect from October 1st, 2019. Venkataraman completed his Post Graduation in Management from IIMAhmedabad and he joined Titan in 1990. He worked in the advertising and marketing functions before becoming the head of sales & marketing for the Titan brand in 2003. Thereafter he took charge of the jewellery division in 2005 and has been instrumental in bringing it to the current position, Titan noted.
The company added that the formal process to induct Venkat into the board of the company and his appointment as managing director of Titan will be completed in due course as the same is subject to shareholders’ approval.
Bhaskar Bhat said: “On behalf of the entire Titan team, I welcome Venkat to lead Titan in its next phase of growth. With his vast experience in nurturing brands, customer orientation and strong focus on creating value, Venkat is well qualified to assume responsibility of journeying Titan towards even greater scale and glory.”