Q2 Update: Titan's Sales Rebound Led By Pent-Up Demand

Titan Co.'s sales rebounded in the quarter ended September on account of pent-up demand, a favourable base and improved walk-ins as most of its outlets reopened across the country.

“The company witnessed strong recovery in demand after the second wave across its consumer businesses with sales moving swiftly above or close to pre-pandemic levels in most of the divisions,” India's largest branded jewellery maker said in its quarterly update. The Tata Group firm said it has been witnessing a steady recovery across segments, with store operational days exceeding 90% for the quarter.

The company said e-commerce sales for its watches and wearables as well as eyewear divisions witnessed healthy growth. Walk-ins at malls and large format stores recovered to 65% and 70% of pre-pandemic levels, respectively, it said. “Most stores are now fully operational barring few in select towns having localised restrictions. Tier-2 cities are witnessing better recovery in walk-ins compared to metros."

Apart from the thrust on digital and omnichannel segments, the Bengaluru-based company also accelerated its retail network expansion. Titan added 13 stores under Tanishq brand, eight in the watches & wearables division and 24 in eyewear in July-September period. It also introduced two CaratLane stores and now has 123 stores under the brand.

Overall, Titan's revenue rose 78% year-on-year on a standalone basis.

Here's what the company said about its key segments:

Jewellery

Revenue in the mainstay segment grew 78% year-on-year, the company said. That came on a low base as revenue fell 2.3% over the preceding year in the second quarter of FY21.

• Demand postponement triggered by the second wave in avenues like gift purchases, occasions, weddings, investments in gold etc. witnessed a strong comeback in the second quarter.

• Both plain and studded segments grew in double digits, with the plain segment registering higher growth.

• Digital gold, a new pilot offering that helps customers purchase gold online and lock-in prices to convert it into jewellery at a later stage, saw good early response.

• Enrollments under the golden harvest purchase plan have surpassed pre-pandemic levels.

• Mandatory hallmarking of gold jewellery in 256 districts in the country—that came into effect in the first quarter of the ongoing fiscal—has Tanishq and its other jewellery brands fully compliant in all aspects.

• Online jewellery platform grew 95% year-on-year.

Watches And Wearables

The division recovered rapidly with sales accelerating across all brands. Like last year, recovery in smaller towns was better than that in the top-eight metros. This segment registered a revenue growth of 73% over the preceding year in the three months through September.

• In watches, new collections catering to different lifestyle segments were launched.

• The Fastrack brand forayed into fast-growing smart hearables category comprising mid-premium range of Neckbands. It plans to expand it to headphones and buds segments. In the hearables category, smart devices in the "Reflex 3.0" series were also introduced.

• E-commerce sales continued its growth momentum, the company said.

• Total number of stores stood at 789 as of September-end.

Eyewear

Healthy growth was witnessed across all segments, the company said, with revenue rising 74% year-on-year.

• E-commerce push has progressed well with the launch of "Titan Eyeplus" App.

• The company launched Fastrack "Computer Glasses" and "Steal Frames" at attractive price points with exclusive units for e-commerce.

• The company added 24 new stores taking its total store count to 629.

Other Businesses

The segment's sales, which includes its youngest brand Taneira and fragrances and accessories, rose 121% year-on-year.

• All 14 'Taneira' stores were operational for about 80% of the total available store days during the quarter.

• Fragrance and accessories recovered across retail, department stores and e-commerce as demand for discretionary items picked up. Women bags continued to be a strong focus for the division with high growth seen in e-commerce and entry into leading department chains.

• Multimedia campaigns conducted to boost sales showed good traction among customers with highest-ever traffic seen for the brand website.

• Financial performance of Titan Engineering and Automation Ltd. was subdued during the quarter amid delays in execution and shipments, primarily caused by logistics and travel restrictions and semiconductor shortages, all of which are expected to ease in H2 FY22. Its revenue declined 43% over the preceding year.

• Aerospace and defence business is seeing strong recovery, but the twin-aisle aircraft segment is continuing to experience challenges. Overall visibility is better than last year.

• CaratLane's sales grew 95% year-on-year.