“We’ve done exceptionally well. We know our first-time customer acquisition is happening at a brisk pace even in the middle to top-end segments, so there’s clearly a migration from other jewellers," said Venkataraman, who currently heads Titan’s jewellery business.
On 1 February, the company reported a 46% jump in net profit and a 35% growth in revenue during the quarter ending December 2018. Revenue from the jewellery business grew 37%, while profits (before finance costs and taxes) surged 76.5%. The company earns more than 80% of its revenue from sale of jewellery.
Titan opened 40 new Tanishq stores in 2018-19, a record for a year, and expects to sustain the pace, Venkataraman said. It also expects four other key drivers to help reach the targeted market share—wedding segment, high-value diamond jewellery, the “golden harvest" purchase scheme, and an exchange programme for customers.
“We expect Tanishq to achieve 21.9% sales and 26.5% Ebitda (earnings before interest, taxes, depreciation and amortisation) compounded annualized growth rate over FY18-21 as it gains from a shift towards organised players led by strong brand, growing store network, and focus on high value studded and wedding jewellery," analysts at Prabhudas Lilladher said after Titan’s last quarter results.
“We’re already a very, very, profitable business (in jewellery) and, therefore, the emphasis is more on becoming stronger in terms of share and focusing less on margin. However, margins come when sales growth happens," Venkataraman said.