"The jewellery industry has been going through a significant soft patch in the first 5 months of CY 2018 as evidenced in the decline of imports of gold by 39% in volume terms. This is primarily led by decline in demand for bullion and to some extent by weak demand for adornment during the period," Titan Company said in quarterly update.
“The weakness in the consumer sentiment has had an impact on our sales also leading to recording of sales below our internal targets. Further, it may be noted that this quarter also has a very high base for comparison (54% YOY growth in the same quarter of previous year), which apart from having a good growth also had a favorable one-off impact of an estimated Rs 2.50 billion sales getting advanced from Q2 to Q1 last year in anticipation of higher Goods and Services Tax (GST) rates,” it added.
The company said its efforts in re-crafting Watches and Eyewear division has started paying off and both the divisions have shown good growth in Q1 '19, although reported revenue growth for these two segments will look optically subdued due to the transition to GST.
Titan Company had underperformed the market by falling 7% in Q1FY19, as compared to 7% rise in the S&P BSE Sensex. Thus far in the calendar year 2018, the stock was remained flat against 5% rise in the benchmark index.