 "Gold price drop impacts Titan's diamond jewellery sales growth")
Titan Industries is likely to witness a slower rate of growth in its diamond jewellery sales during the current financial year, due to renewed interest for traditional gold jewellery.
The recent decline in the price of gold impacted its diamond jewellery business in the just concluded first quarter. The rate of growth here was 18 per cent in the April-June quarter for Tanishq, the jewellery division of Bangalore-based Titan, against 26 per cent growth in the corresponding quarter of 2012-13, a top company official said.
"We have seen a clear shift in the buying pattern during the quarter. Customers were rushing to buy gold jewellery, coins and bullion, mainly due to the decline in gold prices. Though it is temporary, we expect the contribution of diamond jewellery to come down in our overall jewellery business this year," Sandeep Kulhalli, vice-president, retail & marketing of Titan's jewellery division told reporters.
"The decline in the rate of growth of our diamond jewellery sales in the first quarter was an exception. We expect the sales to pick up from the second quarter, more so during the Diwali season, assuming gold prices remain at the current levels," said Kulhalli.
He said the mandatory disclosure of PAN card number details for all high-value purchases contributed to the decline in the rate of growth in the quarter. It is mandatory to disclose the PAN number for all purchases of and above Rs 5 lakh. For Titan, 15-20 per cent of all diamond sales come in the high value bracket. As a result of this rule, the growth rate for the company has dipped from a high of 40 per cent in 2010 to 25 per cent, he said.
During the second quarter, Titan expects 20 per cent growth in diamond jewellery. It is adding 30 new stores this year to the current number of 150. It is also launching new diamond jewellery collections later this week.
The recent decline in the price of gold impacted its diamond jewellery business in the just concluded first quarter. The rate of growth here was 18 per cent in the April-June quarter for Tanishq, the jewellery division of Bangalore-based Titan, against 26 per cent growth in the corresponding quarter of 2012-13, a top company official said.
"We have seen a clear shift in the buying pattern during the quarter. Customers were rushing to buy gold jewellery, coins and bullion, mainly due to the decline in gold prices. Though it is temporary, we expect the contribution of diamond jewellery to come down in our overall jewellery business this year," Sandeep Kulhalli, vice-president, retail & marketing of Titan's jewellery division told reporters.
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During 2012-13, Titan recorded 15 per cent growth in jewellery sales to Rs 8,108 crore, about 30 per cent of which came from diamonds. The diamond jewellery segment grew 27 per cent. For 2013-14, it hopes to maintain similar growth numbers. It is aiming at Rs 10,000 crore of sales, growth of around 23 per cent.
"The decline in the rate of growth of our diamond jewellery sales in the first quarter was an exception. We expect the sales to pick up from the second quarter, more so during the Diwali season, assuming gold prices remain at the current levels," said Kulhalli.
He said the mandatory disclosure of PAN card number details for all high-value purchases contributed to the decline in the rate of growth in the quarter. It is mandatory to disclose the PAN number for all purchases of and above Rs 5 lakh. For Titan, 15-20 per cent of all diamond sales come in the high value bracket. As a result of this rule, the growth rate for the company has dipped from a high of 40 per cent in 2010 to 25 per cent, he said.
During the second quarter, Titan expects 20 per cent growth in diamond jewellery. It is adding 30 new stores this year to the current number of 150. It is also launching new diamond jewellery collections later this week.