Bengaluru: Watches and accessories maker Titan Co. Ltd is targeting a growth rate of over 20% in 2018-19, said managing director Bhaskar Bhat in an interview. The company also expects the 2019 wedding season to be stronger than 2018, which will help prop up the jewellery business, its biggest revenue earner.
“The jewellery business had targeted 25% growth this year. It should be in that ballpark, maybe a little less than 25%. We lost out in the first quarter. Therefore, to make up will be a problem," said Bhat. Jewellery, sold under the Tanishq brand, accounted for almost 80% of Titan’s total revenue in the July-September quarter, he added.
One reason for Titan’s muted first quarter growth was the wedding season, according to Bhat. However, Titan’s jewellery business started picking up in June, primarily on the back of new customers looking for a trustworthy brand amid industry turmoil. Tanishq also witnessed further improvement in sales from October due to a better wedding season.
Next year is expected to be better in terms of wedding jewellery sales. There are many wedding dates lined up for 2019, which is expected to be a much stronger year, said the managing director.
India’s jewellery industry witnessed a soft patch in the first quarter (April-June) with gold imports declining 39%. While profits at Titan’s jewellery business still grew by 16% during the quarter, revenue growth was slower, in single digits, Bhat said. That was around the time the industry was reeling under the aftermath of the Nirav Modi-Mehul Choksi orchestrated PNB fraud, which tainted the entire sector. Everyone—from small and medium jewellers to listed chains—were severely impacted. However, the Tata Group-owned Titan stood to gain from the event as it was perceived to be a trustworthy brand by analysts and consumers alike, said Bhat.
Growth in the watches business is expected to be in the 10-12% range even as margins improve. Other businesses, from eyewear, to fragrances sold under the Skinn brand, and the Taneira handloom sarees, are growing at steady pace, he said.
“Jewellery is a ₹ 250,000 crore market. We are only 5% of it so the share we can take away is very, very large. The other businesses may be a small part of our profit pool, but they bring customers to the Titan umbrella and people want to buy from a Titan outlet. It brings to the table design, customer experience, manufacturing capability and branding. Those are all important corporate values," said Bhat.