Titan Says Big Gold Coin Order, Jewellery Drove Sales Momentum In Q4
Gold bangles sit on display inside a Titan Co. Tanishq jewelry store in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Titan Says Big Gold Coin Order, Jewellery Drove Sales Momentum In Q4

Titan Co. said growth momentum continued in the quarter ended March, aided by demand for gold as prices fell.

Revenue grew 36% in January and February over the corresponding pre-Covid period a year earlier, the jewellery-to-watch maker said in its quarterly update filed with exchanges. Overall, the top line surged 60% during the quarter on a low base. That follows a record revenue in the preceding three months.

A large business-to-business gold coin order that contributed about 8% of the growth aided revenue in the fourth quarter, the company said in its exchange filing. "While the jewellery division has emerged very strongly from the crisis and witnessed strong growth in the quarter, the watches and wearables and the eyewear divisions have also made very good progress on recovery."

Margins, however, contracted because of a lower ratio of studded jewellery and higher share of coins over the previous year, the company said. A reduction in customs duty in February also contributed to lower margins.

As customs duty was paid upfront at higher rates at the time of procurement of gold, the company had to absorb the loss to the extent of duty already paid at higher rates.
Titan's Exchange Filing

Here's how Titan's various businesses fared during the quarter:


The business contributing nearly 80% of Titan's overall revenue continued to see strong sales momentum as a sharp decline in gold prices gave impetus to the consumer demand, Titan said. The large gold coin order further strengthened growth.

The wedding jewellery division, a strong growth driver through the year, saw meaningful increase in its overall share of revenue. Titan expects jewellery division's retail sales in full 2020-21 fiscal to exceed the previous year's number despite despite the lockdown disruption in the first quarter.

Other Highlights For Jewellery Division:

  • Strong growth seen in both metro and non-metro cities.

  • Strategy to increase market share of Tanishq through various local market-specific interventions resulted in a strong growth in Tamil Nadu.

  • Ticket size has normalised compared to the initial period of the year; it is still better than last year's levels.

  • Invoices have moved from near full recovery in Q3 to strong double-digit growth in Q4.

  • Added 26 Tanishq stores on a net basis in FY21.

Also read: Why Did India’s Gold Imports Surge In March?

Watches And Wearables

  • Business recovered to 90% of pre-Covid levels in the first two months of the quarter; reported revenue in the January-March period, however, was flat on a year-on-year basis.

  • E-commerce continues to have higher salience, with all other channels also making good progress.

  • The division also entered into a new category of audio accessories by launching over-the-head headphones and wireless earphones.

  • The business net added 13 World of Titan and 11 Helios stores, and closed 13 Fasttrack stores in FY21.

Eye Wear

  • The division's top line grew 20% during the quarter, driven by the Titan Eye Plus channel.

  • The segment also launched its first Fasttrack branded eyewear store. The division net added 15 stores in FY21.

Other Key Highlights

  • Other businesses saw revenue recovery of around 80% in Q4.

  • Taneira saw 93% recovery in January and February with accessories business being a drag.

  • Fragrance sales have recovered to about 80%.

  • Sales in World of Titan stores are growing at 7%.

  • Accessories sales recovered to around 50% with business from e-commerce growing 2.3 times.

  • CaratLane delivered a growth of 60% for the quarter.

  • Titan Engineering and Automation saw revenue decline 26% during the quarter as the aerospace business continues to face challenges.

"We are encouraged by the strong recovery across all segments," Dolat Capital said in a note following Titan's update. "We continue to believe that the long-term fundamentals are intact and in the absence of higher investment opportunities in the sector, Titan would continue to command high valuations."

Shares of Titan pared rose as much as 2.4% to Rs 1,561 apiece after the update before paring gains.

Of the 32 analysts that track Titan, 14 have a 'buy' recommendation, 11 suggest 'hold' while seven have a 'sell' rating. Based on the 12-month Bloomberg consensus data, the stock has a return potential of 2.8%.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.