Titan witnessed improved business momentum in the last quarter of FY21, in line with trends emerging from Q3 that also saw it report better sales on the back of festive and wedding-linked jewellery demand
New Delhi: Titan Company Ltd reported 60% revenue growth in the March quarter helped by a low base in the same quarter in the year ago period, improved momentum in the market and a dip in gold prices.
In an update on the March quarter performance, the jewellery and watch retailer on Wednesday said, the company recorded "revenue growth of over 36% in the comparable January & February months. Q4 reported revenue growth was further aided by a large B2B gold coin order that contributed 8% of the growth."
Titan witnessed improved business momentum in the last quarter of FY21, in line with trends emerging from Q3 that also saw it report better sales on the back of festive and wedding-linked jewellery demand.
In the last quarter, a dip in gold prices helped the company report revenue growth of 70% in the jewellery division. A low base of in the previous year also helped the company report strong jewellery sales. Jewellery sales fell significantly last year as India moved to a strict lockdown in 2020. In the first quarter of FY21—revenue for the division declined by 71%, according to the company's investor presentation.
"Sharp decline in gold prices during the quarter also gave impetus to the consumer demand for the industry. Q4 also had a large B-2-B order in the quarter, contributing to about 10% of the quarter's growth. The retail and reported revenue (excluding B2B sale) growth for the first two months was ~ 32%. Reported revenue growth for the quarter was 70% due to the low base of March month in the previous year. The strong growth has been seen in both metro and non-metro towns," it said.
Titan runs the Tanishq jewellery stores in India -- 26 new stores were added in FY21 on a net basis. It made gains in the wedding jewellery market during the fiscal on the back of local market innovations, the company said.
“Wedding jewellery has been a strong growth driver for the year and its share in overall jewellery revenue has increased meaningfully, compared to last year. The division's hero market (increase market share of Tanishq) strategy, of making various local market specific interventions, has resulted in strong growth in Tamil Nadu market, which has traditionally been a stronghold of regional jewellers. Despite the 70% loss in retail sales in Q1 due to lockdowns, the division has exceeded the retail sales of previous year on a full year basis," it said.
Other divisions are reporting improved recovery too, it said. “While the jewellery division has emerged very strongly from the crisis and witnessed strong growth in the quarter, the watches and wearables and the eyewear divisions have also made very good progress on recovery. However, it must be pointed out that the second half of March was impacted by the emerging Covid situation," it said in its update.
The watches business reported a recovery rate of close to 90% for the first two months of the quarter; it reported flat revenue growth in Q4. Eyewear reported a 20% growth in revenue during the quarter.
Other businesses such as sarees, fragrances and accessories reported recovery of 80% in revenues in the fourth quarter compared to a year ago period.
The company has fully reinstated the cash component of the salary cuts, taken in May last year by mid-to-senior level employees, with retrospective effect.
Shares of the company rose 1% on Wednesday on the BSE following the company's third quarter update to the exchanges.