Yet to see slowdown in sales post govt's gold directives: Titan MD

Titan said it will take another four to six weeks to assess the impact of higher gold import duty and the PM's appeal to reduce gold consumption on consumer sentiment

Titan will continue investments, even as it notes it is too early to assess how customer sentiment and store footfalls will be impacted by the Prime Minister’s appeal to reduce gold consumption and the recent hike in import duty.

 

The jeweller and watchmaker will take at least four weeks – by the end of the first quarter – to conclude how the measures to protect the country’s draining foreign reserves have impacted downstream. Titan’s jewellery business, a barometer for consumer sentiment, was resilient in April and May, when the Prime Minister made his statement and import duty was hiked.

 

“If fuel prices keep going up, we will know. It’s a little bit of a slippery slope to conclude right now. But I would think at least four to six weeks of data will give us a better feel. I would like to see the month of May completely past us. By mid-June to June end, we will have a better feel,” the company’s managing director Ajoy Chawla told Business Standard in an interview in Bengaluru last week.

 

Chawla acknowledged that the war in West Asia has continued beyond expectations and companies are preparing for significant fuel price hikes, supply chain disruptions and inflation. Despite the volatile macroeconomic situation, Titan will not slow down investments.

 

“If that impacts [consumer] sentiment significantly, it means that if you were expecting to grow at a certain rate, you will grow at a lower rate. Then, all you need to do is manage your profit and loss wisely. But does it mean we will slow down on our investments in manufacturing, investments in technology, investments in retail? Does it mean we slow down investments in businesses which are growing and sub-threshold? No, we will not,” Chawla added.

 

Titan’s flagship jewellery business — known for brands such as Tanishq, Mia and Caratlane — contributes about 90 per cent to the top line, up from about 82 per cent six years ago. The business grew 48 per cent to Rs 79,660 crore in FY26, compared to a year earlier.

 

That is a staggering rise, almost “abnormal” and “unheard-of growth” at a time when gold prices hit new records in the past year, said Chawla. “Just because the gold price is going up and studded [jewellery] share is coming down, doesn’t mean we are doing badly. It simply means something is fuelling growth and we will take that growth any day as it comes because it gives us rupee value.”

 

He acknowledged that soaring prices have had an impact on consumer behaviour, with many preferring to buy lower carat gold of about 18 and 14 compared to the traditional 22. Exchange programmes account for about half of Titan’s total gold sourcing, up from 40 per cent two years ago, across both Tanishq and non-Tanishq brands.

 

“What will happen if gold prices continue to rise at a certain rate? Customers’ wallets are not going up at that rate. If gold price continues to go up, more and more Indians will be comfortable with lower caratage. Simply because it's hard on the pocket. 14 carat was not at all acceptable if I go back seven years. Today, 14 carat is par for the course. 18 carat plain gold jewellery was only for the very Western, Italian kind of looks but today we are doing 18 carat in traditional wedding jewellery also.”

 

Watches and eyewear, Titan’s other two major businesses, are also growing at a decent pace. The watch segment, known for Sonata and Fastrack brands, is expected to be driven by online sales, premiumisation due to a rapidly evolving middle class, and women increasingly buying on their own.

 

Chawla hopes that a revamp campaign will strengthen the eyewear business. “All the renovated stores with larger footprints and a better value proposition — where we have grown, about 16 per cent in the fourth quarter, the skew is 5-24 per cent. Those which have been renovated and upped the game are growing at 20 per cent plus. Once all these get corrected, the chances are we should be able to grow 20-25 per cent on a same-store basis.”