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Titan Company : Dazzles in Dark Times

By Nabamita Chatterjee | Vjmedia Works | February 09, 2017

Being the market leader, the management expect Titan to benefit substantially from increased share of organised jewellery industry, going forward. Further, strong success of new products and recovery in watches business also reinforces their positive stance on the company.

Titan Company has posted an impressive performance in 3QFY17 especially in the backdrop of demonetization. The net revenues increased by 13.9% YoY. They continue to remain positive on Titan owing to its leadership in organised jewellery market, success of new products and recovery in watch business. Envisaging Titan to deliver 12% and 18.4% CAGR in revenue and profit respectively.
 
Jewellery Biz Shines
Overall grammage growth in Jewellery business stood at 4% in 3QFY17, while the average gold prices were 14% higher during the quarter. Lower studded jewellery ratio at 21% and sharp 40% YoY rise in coin sales dragged gross margin profile of jewellery business. Management has decided to merge 20 out of 29 Gold Plus stores into Tanishq stores over the next two quarters. Launch of new jewellery collections – Shubham & Nakashi – received encouraging response from the consumers. Caratlane also witnessed a good quarter in spite of demonetization with faster adoption of digital payment system.

The Management expects to get continued benefits from increased government crackdown on cash transactions and implementation of GST.
 
Margins Improve in Watch Biz
While overall revenues from watches business grew by 5% YoY, domestic sales grew by 9% YoY on the back of 6% YoY growth in volume. While World of Titan outlets and Helios recovered smartly post demonetization, the trade channel – which accounts for half of division’s sales – has taken a longer time to recover. Improved product-mix also aided improvement in segmental EBIT margins.

Tags : Titan 3QFY
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