Titan Company, which owns leading jewellery brands Tanishq, Zoya, Mia and Caratlane, reported an 89% recovery in sales in Q2 of FY 2020-21 led by sharp recovery in the jewellery division post the significant disruption caused by the Covid-19 pandemic in India in the first quarter of the fiscal.
The total income for the quarter was Rs.4,389 crore, including the sale of gold bullion to the extent of Rs.391 crore, resulting in a decline of less than 2% compared to the income of Rs.4,466 crore for the same quarter in the previous year. The decline in total income excluding bullion sale was close to 11%.
The total income for the first half of the fiscal (Hl) was Rs 6,290 crores (including bullion sale of Rs 992 crores), a decline of 34% against the income of Rs 9,461 crores in the corresponding period last year. The decline without considering the bullion sale was 44%.
With the lockdowns being lifted in most parts of the country, the company was able to operate most of its stores across all its divisions. Titan noted that customer walk-ins have started improving even as social distancing norms remain. The recovery rate of revenue improved substantially in the quarter, with the rate being 98% for the jewellery division.
While the customer sentiment improved substantially in the quarter, there was greater willingness to spend on plain gold jewellery and gold coins rather than pure discretionary items, explaining the reason why the recovery rates in studded jewellery within the jewellery division were lower.
The jewellery division recorded a 2% decline in income to Rs.3,446 crore for the quarter (excluding gold bullion sales) as compared to Rs.3,528 crore last year.
Consequent to the recovery, the company declared a profit before tax of Rs.238 crore, a decline of 45% for the quarter. Despite the profit in the quarter, the company has recorded a loss of Rs.97 crore in H1 compared to a profit before tax of Rs.952 crore in the previous year.
The jewellery division declared earnings before interest and tax (EBIT) of Rs.285 crore for the quarter compared to Rs.384 crore in the previous year and Rs.231 crore for H1 compared to Rs.826 crore in the previous year.
The company’s retail chain (including CaratLane) stands at 1,832 stores, as of 30th September, 2020, with a retail area crossing 2.4 million sq ft for all its brands covering 290 towns.
CK Venkataraman, Managing Director of the company, said, “The recovery that the company has witnessed in the quarter has been very satisfying and the positive consumer sentiment witnessed gives rise to hope that the festive period could be good for all the divisions of the company. The company continues to gain market share in its key businesses aided by innovation and total commitment displayed by its employees and the extended business associate network. The focus on cost and capital employed has helped the company manage its bottom line and cash flows very well.”
Caption: Necklace and earrings from the recently launched Ekatvam collection by Tanishq. © Titan Co.