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| Titan raises capex by 43% in FY10 |
| Mahesh Kulkarni / Bangalore Oct 11, 2009, 00:34 IST |
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Company says it does not believe in reducing investments during the downturn.
At a time when most of India Inc is shy of announcing big-ticket investments, Titan Industries is going strong. The Rs 3,833-crore, Bangalore-based Tata Group arm has raised its capital expenditure plan by 43 per cent to Rs 100 crore for the current fiscal. The company’s interests range from watches and jewellery to precision engineering.
Bhaskar Bhat, managing director, Titan Industries, said the company did not believe in reducing investments during the downturn and would keep investing for future growth.
“We have cut costs and reduced wastage in manufacturing. But we have maintained our investments on expanding our sales network and launching new brands to achieve better top-line growth,” he said.
The new investments will be for expanding the retail network, beefing up the information technology set-up and balancing manufacturing capacities. This year, the company plans to open 100 stores across product segments, mainly for watches. Last year, Titan had opened 130 stores, of which 50 were eye-wear outlets, Bhat told Business Standard.
This year, Titan has started 14 World of Titan outlets and plans to open 26 more this fiscal to take the tally to 313. The new stores will come up mostly in Tier-II and III cities.
“Last year, our focus was on the semi-urban market, which was unrepresented but showing good growth. About 50 per cent stores that we opened last year were in semi-urban markets,” he said.
In 2008-09, Titan introduced a new format, Helios, a multi-brand sales outlet for premium watches, and launched a kids watch brand, Zoop.
“This year, we are planning to expand the Helios network to two more locations. We are currently looking at opportunities in Mumbai, New Delhi and Chandigarh. By the end of March 2010, depending on where we get the right location, we will open these outlets. Currently, the real estate costs are low and we negotiating rents at many locations,” Bhat said.
He said the second quarter of the current fiscal was challenging as gold rates hit more than $1,000 per ounce (oz) and were still rising.
The first six months of the current fiscal were average as far as sales are concerned. However, the company was confident of more than 20 per cent growth in sales, he said.
“Titan’s new businesses are in the early stages of growth. We expect this Diwali to be good for sales as companies have started giving salary hikes to their employees and Diwali bonuses will be paid on time. The automobile sector is looking up and we expect good sales\ growth in the second half of the year,” Bhat added.
The watch segment contributes to around 33 per cent of the company’s total sales.
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