Titan Q3 business update!

Titan’s latest business update indicates that the company’s business has recovered significantly in the Oct-Dec period, on the back of a strong festive season. Here are a few highlights:

Jewellery Segment

• Jewellery division, which contributes to nearly 80% of overall revenues, has crossed the recovery phase to growth phase in the quarter. 
• The Company had previously announced a 15% growth in the 30-day festive period from Dussehra to Diwali. Interestingly, the growth trend has sustained even after the festive season ended and the division has recorded close to 15% growth in the period.

• The quarter also witnessed a well-rounded recovery with improvement in walk-ins and pick up of sale in metros, sub 1-lakh category and studded segment. 
• The jewellery industry saw a resurgence in the festive season along with a pent up demand for wedding jewellery as most of the weddings in H121 were deferred.

Other Segments

• The other two large divisions Watches and Wearables and Eyewear has also reached near full recovery in Q3. 
• Watches and Wearables (around 12% of revenue) saw a recovery rate of around 88% in Q3, compared to the revenue of the same quarter in last year.

• Eye-wear segment (~4% of revenues) has reached 92% of last year levels. Other businesses had a revenue recovery of around 80%, compared to the revenue of same quarter in last year.

Analysis

Titan’s robust update about its Jewellery business is encouraging. While ticket size continues to be higher due to higher gold rates and higher share of wedding-related products, 100% recovery in buyers (number of invoices) is yet to be seen.

While the customer sentiment has improved over the quarters, there was greater willingness to spend on plain gold jewellery and gold coins rather than discretionary items, explaining the reason why Watches and Eyewear are taking longer to achieve full recovery. The business has been impacted due to a sharp drop in discretionary spending as well as the lockdown imposed to contain the pandemic. While the recovery in sales in various segments is encouraging, all segments reaching growth phases could take a few months.