Titan Company spurts after strong Q2 biz update

Titan Company rallied 4.75% 2,716.85 after the Tata Group company said that it witnessed double-digit growth across most businesses with overall sales growing 18% year on year (YoY).

Retail network continued the pace of expansion adding 105 stores (net) for the quarter. The outlook for festive season (from Navratri in end Sep'22) continues to be optimistic and is visible in positive consumer sentiment across categories, the company stated.

The company's flagship Jewellery division grew 18% YoY on a high base of Q2 FY22 that had elements of pent-up demand and spillover purchases of a Covid disrupted Q1 FY22. Gold jewellery (plain) clocked low double digit growth whereas studded sales were higher than the overall division driven by good activations and better contribution from high value purchases. The product-mix improved compared to last year but continued to be below pre-pandemic levels.

Titan said that the walk-ins grew in low double digits YoY with steady buyer conversions. New store commissions (net) comprised of 8 domestic stores in Tanishq, 16 in Mia by Tanishq and 1 in Zoya.

The company's watches & wearables division grew 20% YoY, clocking its highest quarterly revenue. The strong tailwind demand led by a desire to own more premium/differentiated watches helped brand Titan grow fastest in the watches category (assisted by higher volume and average selling prices YoY). The division continued its store expansions pan-India (net) with 7 new store additions of Titan World, 14 of Helios and 2 in Fastrack for the quarter.

In the eyecare segment, its Titan Eye+ stores saw double-digit growth YoY. This, however, was offset by lower YoY sales across Trade & Distribution channel leading to an overall 7% YoY growth for the division. EyeCare expanded its nation-wide presence adding 36 new stores in Titan Eye+ and 2 new Fastrack prescription stores (net) for the quarter.

Titan's Fragrances & Fashion Accessories (F&FA) jumped 34% YoY driven by 37% increase in Fragrances and 29% growth in Fashion Accessories. Amongst key offline channels for F&FA, large format stores (LFS) grew fastest followed by trade, both clocking much higher growths than the overall division. Taneira grew 114% YoY with meaningful contributions from new stores opened over the last one year.

The business of the company's wholly-owned subsidiary, Titan Engineering & Automation (TEAL), grew 139% YoY with automation solutions division growing by 240% YoY and aerospace and defence division clocking 66% growth.

Titan said that CaratLane's business grew 56% YoY driven by promotions around Raksha Bandhan and hero launches during the quarter. Titan Company holds 72.3% stake in CaratLane.

Titan Company, a joint venture between the Tata Group and the Tamilnadu Industrial Development Corporation (TIDCO), commenced its operations in 1987 under the name Titan Watches. In 1994, Titan diversified into Jewellery (Tanishq) and subsequently into EyeCare.

Over the last three decades, Titan has expanded into underpenetrated markets and created lifestyle brands across different product categories including fragrances (SKINN), accessories and Indian dress wear (Taneira).

The company reported a steep rise in its Q1 FY23 net profit at Rs 793 crore compared with Rs 61 crore in the same quarter last year.

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