Titan jewellery biz revenue declines 4% in Q4

Titan Company announced its Q4 FY22 business update after market hours today, 6 April 2022.

Titan Company finished the quarter on a satisfactory note despite Q4 FY22 getting disrupted twice - first due to the partial lockdowns caused by Omicron wave in January 2022 and during the month of March 2022 in which consumer sentiments got affected adversely due to (a) sharp increase and volatility in gold prices and (b) uncertainty due to a fragile gee-political situation.

However, the underlying demand continued to be strong across all of its businesses with most segments posting Y-o-Y growth over a strong Q4 FY21 base. The network expansion and campaigns have continued to progress well in anticipation of an upbeat Q1 FY23 which is expected to be normal after a gap of two years of lockdowns in the same period, the company highlighted.

 

Jewellery Segment:

The revenues from the division declined 4% year-on-year over a strong Q4 FY21 base (with a benefit of a large B2B order). The jewellery division had recorded a 70% jump in income to Rs 6,397 crore for Q4 FY21 (excluding gold bullion sales) as compared to Rs 3,754 crore in Q4 FY20. However, during this quarter, the business saw tepid activity in top cities on account of the Omicron wave in Januray 2022, a robust resurgence in February 2022 and a drop in customer purchases in March 2022 (on the back of sharp rise in gold prices and sentiment impact due to the external geo-political conflict). While walk-ins saw minor decline, the customer conversions and ticket sizes grew marginally for the quarter compared to the same period last year.

The sales from top 8 cities grew in single digits while the rest of India saw a small decline. Though the plain jewellery category bore the brunt of gold volatility in March 2022 leading to a slight decline for the quarter, studded sales clocked in a high single digit growth, thereby partially cushioning the impact. Golden Harvest enrolments witnessed double digit growth rates. Store expansions (net) continued as per plan with commissioning of 7 new stores in Tanishq, 8 in Mia by Tanishq and 1 in Zoya. The division added 16 new stores in Q4 FY22, taking the total to 444 as of March 2022.

Tanishq's Rivaah wedding jewellery collection 'Romance of Polki - a singular charm of uncut diamonds adding a new life to a bride's trousseau, was launched in March 2022 for the upcoming wedding season. Mia by Tanishq's new collections of 'The Cupid Edit' and 'Kiss of Spring-2' focused on events of Valentine's Day, Women's Day and Mia's 10th anniversary. Zoya's marquee new collection 'Aetema' - ensconcing two new patents on stone cuts and an ode to infinite feminine energy marrying ancient symbolism with modern aesthetics beautifully underscored the brand's design legacy. During the quarter, Titan Company acquired a minority stake in Great Heights Inc. (through its wholly-owned subsidiary TCL North America Inc.) to deepen its understanding of the "Lab grown Diamonds" space.

Watches & Wearables Segment:

Watches & Wearables witnessed a 12% growth in revenues during the quarter over the corresponding quarter, last year. The division added 34 new stores in Q4 FY22, taking the total to 843 as of March 2022.

The division saw good growth momentum amidst a challenging external environment with sales increasing across all offline channels on the back of Titan brand. The sales from Retail and Large Format Stores (LFS) clocked higher growth followed by trade. West and North regions saw much higher growth amongst geographies. The store expansions (net) continued with 24 new stores in Titan World and 10 in Helios. Over 44 Titan World stores were renovated to a new format to offer a wider choice of premium brands enhancing the overall customer experience.

Titan's new analog collections of 'Octane Aerobatics' (8 mechanical variants), 'Ladies Edge' (6 variants) and 'Unending Beauty' (11 variants), Fastrack's 'After Dark' (9 variants) and Sonata's new collections of' Versatyle' (10 variants) and 'Women of Steel' (15 variants) were well received. The smart watches and hearables segment saw significant acceleration in the quarter with the new launches across 'Titan Smart Pro' (6 variants), 'Fastrack Reflex Vox' (4 variants) and 'Reflex Tunes- FT3' (4 variants) evoking a lot of interest and excitement.

Eyecare Segment:

The Eyecare segment registered a 5% rise in revenues in Q4 FY22 over Q4 FY21. The division added 51 new stores in Q4 FY22, taking the total to 733 as of March 2022.

The division's growth was led by frames and sunglasses. The network expansion continued in line with ambitious growth plans for the next year. Product innovation continued to be the core focus area and center piece of Titan Eyeplus offerings. 'EyeX' - launched in January 2022 - a first of its kind Smart Wearable product has established the division as a pioneer in Smart Eyewear within a short span of time. The product bagged two prestigious awards at RED DOT - in Product Design and in Smart Category during the quarter.

Other Business Segment - Fragrances & Fashion Accessories, Taneira:

Revenues from its other businesses rose 23% in Q4 FY22 as compared to Q4 FY21. The increase in sales from departmental stores and ecommerce led to a healthy 21 % YoY growth in fragrances and 67% YoY growth in fashion accessories businesses respectively. Brand SKINN ran a Valentine's Day campaign garnering over 8 million views and 3.2 lakh engagements. Fastrack women's bags' Spring Summer collection 'Soft Cocooning' was launched in March 2022 with 96 variants. The collection plays with both PU and Nylon material and is an amalgamation of comfort driven yet trendy looks in summer pastel hues.

'Taneira' launched its stores in Jamshedpur and Lucknow extending its presence to eight cities and 4 new stores in Q4 FY22, taking the total tally to 20 stores. A hand weaving loom installation at the flagship store at lndiranagar, Bangalore saw a one-of-a-kind initiative to provide a first-hand experience of the complete saree making process to customers. "Sundarban" (manifesting the spirit of the forest into sublime sarees) and "Spring Summer" collections (weaving human emotions of healing, nostalgia and happiness in sarees and ready to wear products) and new bridal campaigns featuring rich opulent weaves from various clusters across the country, were launched in the quarter.

Subsidiaries:

On a standalone basis, Titan Company recorded a 3% fall in revenues during the quarter as against Q4 FY21. The division added 105 new stores in Q4 FY22, taking the total to 2,040 as of March 2022.

Titan Engineering & Automation (TEAL) (wholly-owned): TEAL's revenues surged 77% in Q4 FY22 over Q4 FY21. The Automation Solutions business of the company saw large dispatches in the quarter triggered due to postponement of deliveries on the back of supply chain disruptions earlier. The enquiries have shown gradual improvement but are still below normalized levels. The Aerospace business achieved moderate growth with good recovery in orders. The manufacturing facility at Hosur (Bangalore, Karnataka) has been upgraded to operationalize a state-of-art ISO 6 (1000 Class) clean room and cleaning facility to serve customers in the precision component business.

Caratlane (where Titan Company holds 72.3% stake): Caratlane's revenues soared 51% in Q4 FY22 from Q4 FY21. The division added 9 new stores in Q4 FY22, taking the total to 138 as of March 2022.

Despite a disrupted quarter, Caratlane's digital first strategy enabled it to post a 51 % growth YoY across product categories and locations. The digital approach allowed for early trend detections leading to focused reactions in high potential micro-opportunities. The sales in Febuary 2022 nearly matched the highest monthly sales of November 2021 (of Dhanteras) driven by the highly successful Valentine Day's campaign of 'Love it or Hate it, #GiftACaratLane'. 'Harmony', a new collection inspired by the design of sound waves, was well received by the customers. The company's handcrafted silver jewellery brand, 'Shaya', opened its first-ever physical store at Mumbai and Bengaluru whilst deepening its presence in metro cities to improve accessibility.

The scrip fell 0.26% to end at Rs 2,541.25 on BSE. Titan Company is engaged in making and selling watches, jewellery, eyewear and others.

The company reported a standalone net profit of Rs 987 crore in Q3 FY22 as against a net profit of Rs 419 crore Q3 FY21, recording a growth of 136% on YoY basis. The total income for the quarter was Rs 9,570 crore, registering a growth of 31% as compared to Rs 7,324 crore in Q3 FY21.

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