After reporting a 56 per cent decline in Q1FY21, the revenue of Tanishq, the jewellery division of Titan, has recovered to almost 90 per cent of pre-Covid levels, ahead of consensus.
According to an ICICI Securities note, the likely drivers are rising volumes, mainly due to the somewhat stable gold prices, and consumers's acceptance of higher gold prices.
“We are encouraged by the customer response we have got and are very happy with business recovery. Tier-2 and Tier-3 towns have continued to do better than Tier-1 towns, even as almost all towns have seen improving recovery trends month on month,” Ajoy Chawla, CEO of Jewellery Division at Titan told Business Standard.
Overall, July and August saw good recovery, which was closer to 90 per cent, but September could be a little lower because of the ‘Shradh’ (a 16-day period when Hindus remember their ancestors by offering prayers).
The company will be launching a collection for the coming festive season followed by some new collections for the wedding season. “We are hoping for a good demand during the festive season, while we expect a stronger wedding season as a lot of weddings were deferred in Q1. We are positive and looking forward to a healthy third quarter,” added Chawla.
The Bengaluru-headquartered firm will be adding 30-35 new Tanishq stores in FY21 as compared to 41 stores in the previous financial year. It will stick to the strategy of expanding into Central India as the company is seeing sales traction in the region.
Tanishq has introduced a host of virtual features to bounce back to business in the past few months. Video selling, appointment-based selling, endless aisle and virtual try-ons are some of the features the company’s technology team has rolled out to enable at-home buying. It has seen big ticket sales of up to Rs 10 lakhs for wedding purchases in several cases through these virtual buying features.
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