Bengaluru: Titan Co. Ltd, maker of watches and accessories, said the second half of 2016-17 exceeded expectations on all counts despite demonetisation, a reversal from the first half of the year when the firm struggled due to a few policy changes in the jewellery industry.
Consumer sentiment and demand recovered significantly by the start of the fourth quarter of 2016-17 and sales were good across its divisions in varying degrees, Titan said in a quarterly update filing on the BSE on Tuesday.
The jewellery division, spearheaded by its primary brand Tanishq, had a good quarter due to the “resounding success of the studded jewellery activation”, the firm said. It launched a new sub-brand under Tanishq called Rivaah during the quarter—a range of wedding jewellery—and is spending considerable marketing efforts for its promotion.
Gross margins from its jewellery business are also expected to be good in the quarter and enrolments and redemptions in its Golden Harvest Scheme are on track, Titan said.
Jewellery accounts for a major portion of Titan’s overall revenue. The firm opened 16 Tanishq stores in 2016-17.
Its watches division, which had been struggling after demonetisation hurt sales through trade or multi-brand retail channels, also had a good quarter, according to the company’s BSE filing. The trade channel has now recovered from the after-effects of demonetisation, it added.
But the exports and original equipment manufacturing businesses within Titan’s watches division continue to face significant headwinds, slowing down overall growth marginally. During the quarter, the company launched its slimmest ceramic watch, Edge Date, and also entered the fitness band market with an activity tracker launched under the Fastrack brand. Titan added 24 World of Titan stores and eight Helios stores during 2016-17.
The firm also said a revival in demand for sunglasses turned around overall sales at its eyewear division. But the closure of 12 Spexx stores dampened topline growth to some extent. It opened 59 Titan Eye Plus stores during the year.
During the quarter, the company also opened its first handloom apparel store in Bengaluru’s upscale Indiranagar, marking its entry into the women’s wear segment, though it is in pilot mode for now.
Overall, Titan is optimistic about topline growth in the coming year, though a high goods and services tax rate for jewellery might have some impact on its growth rate.
