Titan says jewellery, watches segments performed well in December quarter
Bengaluru: Titan Co. Ltd Tuesday said its main business segments—jewellery and watches—performed well in the October-December festive season quarter.
Traditionally, September-December yields the largest revenue for Titan since both Dussehra and Diwali fall during this period and the festive season did not disappoint this year either, the company said in a filing with the BSE.
The quarter started off on a good note for all jewellers after the government removed the industry from the purview of the reporting requirement under the Prevention of Money Laundering Act (PMLA) on 6 October.
Under the earlier PMLA provisions, any sale of gold above Rs50,000 required customers to furnish PAN (permanent account number) or Aadhaar. The change in the provisions sparked a surge in sales at Titan’s flagship Tanishq jewellery stores just in time for the festive season, the company said.
The jewellery segment—the largest revenue contributor—clocked double-digit retail growth over the festival dates in the previous year. The 2016-17 festive season, according to Titan, was one of the best in the company’s history with Dussehra and Diwali falling in the same quarter.
Revenue at Titan’s jewellery business grew 15% during October-December 2016-17, i.e. Q3 2016-17.
Although Dussehra was in September this year, retail growth in the jewellery segment has been healthy and in line with management expectations in Q3 2017-18, Titan said. But primary growth in the quarter was lower due to a higher franchisee billing of about Rs250 crore that happened towards the end of the previous quarter.
Still, Tanishq continued to gain market share with special collections like ‘Padmavati,’ launched in association with the movie of the same name, performing exceptionally well in terms of sales. The company also launched a men’s jewellery sub-brand under Tanishq called ‘Aveer’ in the last quarter.
Titan’s watches segment posted healthy same-store-sales growth in Q3 2017-18 across all retail formats and its end-of-season sale, which began towards the end of the quarter, is expected to boost sales further. The watches business also benefited from a regulatory change during the period, with the government lowering the goods and service tax (GST) rate on the category to 18% from 28%.
The government also reduced the GST rate on sunglasses to 12% from 18% during the quarter and Titan’s watch and eye wear divisions have corrected prices accordingly. Still, the company’s sunglasses business continued to underperform as distributors and dealers remain wary about stocking the category due to changes in the GST rate. However, the prescription eye wear business continued to grow at a healthy pace, Titan said.
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