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Titan Company issues robust Q1 business update

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The company recorded revenue growth of about 117% (excluding bullion sales) in Q1'22, with revenue contribution of approximately 50%, 10% and 40% coming from April, May and June months respectively.

Titan Company said it entered the Q1 quarter with a good sales momentum. However, the sales were hit to a small extent until third week of April 2021, from the rapidly rising second wave of pandemic, primarily due to the temporary store closures in some important states. Thereafter, most stores were shut within a short span of time and could re-open gradually in June 2021 only, with several restrictions on operating hours and days of the week. Sale from stores that stayed open in May 2021 was muted. The company's focus was back on keeping everyone safe and few stores were proactively closed in the highly impacted towns.

 

The initiative of customer outreach that brought in sales last year was also not undertaken this time considering that humanitarian impact on consumers was severe and widespread this time. The sales recovery is gradually improving across the businesses, along with the increase in the store operational days. This year, Watches & Wearables and Eyewear segment has also witnessed rapid recovery in walk-ins with the re-opening of stores, which was seen in only jewellery division last year.

During the quarter, the jewellery segment grew by 107% (excluding bullion sales) as compared to last year, primarily due to zero sales in April of last year. Most of the sales of May month was lost in both the years. Despite the lower number of store operational days in the month of June 2021 (since large states of Tamil Nadu and Karnataka markets were under lockdown for almost all of June 2021), sale for June 2021 is marginally ahead of the sale in June 2020. Total store operational days were at 73%, 10% and 58% for the April 2021, May 2021 and June 2021 respectively and 47% for the quarter.

The division is gaining good traction in new customers and its mix in total buyers has reached the pre-pandemic levels. Golden Harvest fresh enrollments, while adversely impacted due to the lockdowns, still showed a growth over last year same period and refund requests have been quite low and comparable to pre-pandemic levels.

90%+ of stores are now open. Amongst these, around a third are shut on weekends, in line with local restrictions. 96% of staff is vaccinated across all stores (including housekeeping & security), while 100% of open stores have only staff vaccinated with one dose or have recently recovered from COVID-19 and not yet due for vaccination.

The government has started the phased implementation of mandatory hallmarking of gold jewellery with effect from 16 June 2021, which is an important step for the development of the industry and safeguarding the consumer's interest. All of the company's stores have the hallmarking license and 100% of Tanishq, Mia, Zoya jewellery is hallmarked. Mia launched 'Smolitaire' and 'Romani' collections during the quarter. Zoya has launched 'Samave' collection towards the end of June. Network expansion plans got delayed due to the lockdowns. The division added 5 Tanishq stores on a net basis in the quarter, with the retail space addition being 20,000 square feet.

The watches & wearables division grew 280% over Q1 FY21 as sales were nil in April month of last year and moreover the recovery this year has been faster than that witnessed last year when footfalls in stores were very weak due to higher apprehension of covid. Total store operational days were at 70%, 24% and 51% for the April 2021, May 2021 and June month respectively. Sales were strong in the e-commerce channel especially in the second half of April 2021 and May 2021.

The eye wear division grew 117% over Q1 FY21 as sales were nil in April month of last year and also on back of rapid recovery in walk-ins in May 2021 and June months, compared to last year. Total store operational days were at 71%, 19% and 62% for the April 2021, May 2021 and June month respectively. 90%+ of stores are now open. The division accelerated its path on e-commerce and launched Titan Eyeplus's App. It also launched Neo Progressive lens and computer glasses, exclusively for E-commerce channel. During the quarter, the division added six stores on a net basis, with addition of about 1,500 sq. feet of retail space.

Among the subsidiaries, Titan Engineering and Automation (TEAL) had a revenue decline of 15% in Q1 FY22. The business is seeing a strong comeback in the Automation Solutions Business over the last few months and the enquiries are very encouraging. With respect to the Aerospace & Defence Business, the business is seeing some signs of growth in the single aisle aircraft segment but it appears that the long haul segment will take more time to recover.

Further, CaratLane (of which 72.3% is owned by Titan Company) grew by 274% over Q1 FY21. Total store operational days were 41% for the quarter. Online continued to see strong growth momentum, growing at 210% for the quarter driven by strong domestic and international demand as well as demand coming from Shaya and CaratLane Live, the video assistance feature. During the quarter, CaratLane launched Kanak, its core collection for Akshaya Tritiya, inspired by the golden swaying fields of wheat. 100% of CaratLane jewellery is hallmarked. CaratLane opened four new stores during the quarter taking the total store count to 121.

Titan Company posted a 48.2% jump in standalone net profit to Rs 529 crore on 60% rise in net sales to Rs 6,991 crore in Q4 FY21 over Q4 FY20.

Titan Company is engaged in making and selling watches, jewellery, eyewear and others.

Shares of Titan Company skid 2.30% to Rs 1,722.75. The stock hovered in the range of Rs 1,717.55 to Rs 1,782.95 so far.

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First Published: Jul 07 2021 | 9:28 AM IST

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