Titan looks to double jewellery market share over next 4 years

Bengaluru: Titan Co. Ltd aims to double its market share in the jewellery space over the next three to four years from around 5% currently, said its managing director-designate C.K. Venkataraman.

Wedding jewellery will be a key driver in reaching the market share goal, he said in an interview.

“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.

India’s jewellery industry did not have a good run in 2018. The Rs. 14,000-crore scam at Punjab National Bank orchestrated by Nirav Modi and Mehul Choksi in February last year affected the entire sector. However, Titan has been among the few trusted brands.

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.