Festive sales and pent-up demand push Titan closer to growth in Q3

While jewellery division crosses recovery phase to growth phase, watches & eyewear divisions near full recovery

Riding on the back of festive sales and pent up demand, jewellery-to-watches maker Titan, which had seen a washout of sales in the first quarter of FY21 because of lockdown disruptions, has moved much closer to growth. While the jewellery division has crossed the recovery phase to growth phase, watches and eyewear divisions have also moved much closer to the full recovery.

The jewellery business registered a 15 per cent growth during the 30-day festive period from Dussehra to Diwali in the third quarter as compared to last year, while the watches and wearables segment had a recovery rate of around 88 per cent in the quarter, compared to the corresponding quarter a year ago. The eyewear division too had a strong recovery of 92 per cent in Q3, compared to the corresponding quarter a year ago.

“Titan’s Q3FY21 performance is better than expected given the sustenance of growth seen during the festive season continuing for the entire quarter. The bunching of weddings has helped in driving this demand further,” said Abneesh Roy, Executive Vice President at Edelweiss Financial Services.

For the jewellery segment, the quarter witnessed a well-rounded recovery with improvement in walk-ins and pick up of sale in metros, sub Rs 1-lakh category and studded segment. “The division continued to see a significantly higher share of gold coin sales and very good growth in wedding jewellery sales. Ticket size continues to be higher due to higher gold rates and higher share of wedding related products but 100 per cent recovery in buyers (number of invoices) is yet to be seen,” said the Bengaluru-based company in a BSE filing.

 

The festive period saw a surge in footfall in the shopping zones and the recovery rate improved in metros in Q3 for the watches and wearables segment. The recovery rate for all the retail channels has been steadily increasing month on month primarily due to higher consumer walk-ins. Omni-channel capability has been scaled up to 80 per cent of World of Titan and Fastrack stores, said the company. In the year so far, the division added six Helios stores and closed 14 Fastrack stores, on a net basis, reducing 7,000 square feet of retail space.

In the eyewear segment, the division added 39 stores and closed 52 stores, reducing 13 stores on a net basis, ending up with a reduction of about 10,000 square feet of retail space. 

In other businesses, ethnic wear brand Taneira opened another store in Mumbai during the quarter, taking the total store count for the business to fourteen covering six cities. 

The company’s 100 per cent owned subsidiary, Titan Engineering and Automation Limited, had a decline of 31 per cent in Q3 revenue as compared to the corresponding period last year, with one large order currently in transit. “The automation business has been doing well on the back of medical devices order for detecting TB and Covid-19. The aerospace business continues to face headwinds due to the grounding of flights due to Covid-19,” said Titan.