Titan’s jewellery sales grow 11% in Q3

Titan's jewellery division Tanishq reportedly met its revised expectations for the quarter. Representative Image/Reuters

The shares of Tata's watch and jewellery arm Titan rallied by 1.65% on Monday despite bloodbath in the global equity markets, as the company announced encouraging performance in the jewellery sales segment during the December quarter.

The share of the closed at Rs 1,158.35, a rise 1.65% over Friday's close on Bombay Stock Exchange. During the intra-day trade, the company's shares touched a high of Rs 1,170 on the BSE after the company announced a pick-up in jewellery sales during the December quarter. Such was the rally in the Titan's stocks that during the intraday trade, Titan single-handedly dragged the entire BSE Consumer Durables Index in black, despite all other companies of the index in red.

This comes on the back of the company announcing 11% growth in sales of jewellery during the September-December quarter. The rally was also backed by the surge in gold prices, that touched an all-time high on Monday.

"Retail sales in jewellery were better than expected at the beginning of the quarter, possibly due to a good wedding season and reasonable inelasticity of wedding jewellery, but growth in watches and eyewear were difficult to come by," Titan said in its quarterly update ahead of Q3 results.

Titan's jewellery division Tanishq reportedly met its revised expectations for the quarter. While the revenue growth for the quarter is 11%, the retail growth was much better at 15%. During the base quarter of Q3, FY19, Titan had seen a large institutional order for gold coins of Rs 200 crore.

In early October, Tanishq launched 'Virasat' collection, inspired by the rich heritage and artistry of the royal city of Udaipur, in the plain gold category for the festival season of Diwali. During the current fiscal, the jewellery division has added 34 Tanishq stores, 8 Mia stores for the year to date on a net basis, with the retail space addition being approximately 117,000 sq feet.  Currently, Titan is expected to add only around 50 stores for the fiscal. This is primarily due to the operational delays in roll out and not because of change in plan to reduce the number of stores to be opened, it said.

However, the company's watch division's growth for Q3 was flat compared to previous year. "Market for watches itself is estimated to have declined by around 4% due to poor customer sentiment and this led to primary sales to trade and e-commerce channels declining sharply. Our own retail stores (WOT, Fastrack and Helios) grew quite well despite the weakness in the market," Titan said in a statement.

The company launched new watch brands such as Titan Connected, Raga Facets, Titan Maritime, a collection inspired by sea voyages during the medieval era during the quarter. Fastrack brand launched 'Reflex Beat', in fashion technology, an activity tracker with heart rate monitor.

After witnessing two strong quarters, the eyewear division's revenues grew by only 2%, primarily led by heavy competitive activity, lower primary sales to trade channels and the disruption in the second half of December due to the nation-wide protests. Growth for the year was at 14%. The company also said that its sales in all divisions in the second half of December was impacted to some extent due to forced store closures in the Northeast and in many other parts of the country.

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