Titan Says Diwali Demand To Determine Q3 Performance
Titan Co. is confident that business will improve over coming quarters as people continue to buy gold for festive and security purposes. But the quantum of growth, it said, will be determined by the demand seen on Diwali and Dhanteras.
“We are working on improving things rather than guessing what tthings will improve to,” CK Venkataraman, managing director at the country’s largest branded jewellery maker, told BloombergQuint’s Niraj Shah in an interview. “We’ll be in a much better place to predict for the quarter after Diwali.”
Owner of the Tanishq brand and the maker of namesake watches reported a 3% year-on-year fall in total revenue in the quarter ended September. Sales in its jewellery segment, which accounts for 80% of total revenue, however, rose 8.7%. The company, the managing director told analysts in a post-earnings call, expects jewellery sales in the third quarter to be 90-100% of previous year’s sales. That’s despite the first 10 days of the festive month seeing high single-digit growth.
“This is underwhelming in the context of Q2 seeing only 4% decline despite an extended inauspicious period and slow reopening of metro cities,” Credit Suisse said in a report.
Venkataraman, however, said the lower expectation is realistic and pragmatic. A number of schemes and promotions had been put in place to ensure safety because of which many customers were encouraged to book and bill a purchase within the first 10 days, but collect the purchase around Diwali. This could possibly mean a drop in sales in the last 10 days as the company may have pushed a bulk of the sales to the first half, he said.
Watch the full conversation here: