Mumbai: Watch and jewellery maker Titan Industries Ltd plans to enter the South African market in a few months and sees nearly 10% of watch export revenues coming from there in 5 years, a top official said. “We will shortly be entering South Africa in the next few months, we have found a distributor there who will be our partner to enter the market,” managing director Bhaskar Bhat told Reuters on Monday.
“In the next 5 years this market will contribute to as high as 10% of watch export revenues,” he added.
Titan had earlier said it was exploring possibilities to expand its business in Asia and South Africa.
The firm, which retails watches under a range of brands including the premium Titan and the economy brand Sonata, plans to join an increasing number of consumer firms who are eyeing the African market as the next growth vehicle to boost growth.
Bhat also said the firm’s capital expenditure for FY11 had been raised to Rs150 crore from Rs100 crore announced earlier this year.
“Our capex has been fixed at Rs150 crores from Rs100 crores earlier. It will be mainly used for our manufacturing expansion plans,” Bhat said.
In February Bhat had said he planned to add 80-100 retail stores and raise watch manufacturing capacity by 3 million units this fiscal to 18 million units per annum.
Bhat also said the firm does not have any plans for revision of watch prices in the near-term as it is not facing any input price pressure but did not comment on the firm’s medium to long term pricing strategy.
Prices of steel, the main raw material used for making watches, have risen nearly 30% in India in the six months to April 2010 as prices of key raw materials - iron ore and coking coal- escalated, prompting price hikes.
Titan expects its topline in the current fiscal to grow at 20-25%, in line with the growth witnessed in the last fiscal and expects it to be driven by continued robust performance in its watch and jewellery business.
“We expect our overall revenue growth to be 20-25% this fiscal..it’s in line with what we have achieved in FY10..the estimates are keeping in mind the volatility in gold prices,” he said.
Along with watches, Titan sells jewellery under the ‘Tanishq’ and ‘Goldplus’ brand, retails accessories such as eyewear under ‘Titan Eye’ and is also into the precision engineering business.
Late on Friday the firm reported a 57% jump in FY10 profit to Rs250 crore as revenue rose 23% to Rs467.40 crore.
“The growth was because both our watch and jewellery business benefitted from a very good wedding season in the first three months of this year,” Bhat said.
At 12.42 p.m., shares of the firm were up 2.77% at Rs2,188.35.