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Demonetisation and the launch of Goods and Services Tax have swayed consumers in favour of organised companies like Titan that are well-governed and tax-compliant, according to Bhaskar Bhat, Managing Director, Titan Company Ltd.
In all the categories where Titan is present there is strong competition from unorganised players. But customer preference for unorganised players is declining. Today, consumers are still buying jewellery in cash (but the limit is ₹2 lakh), and this is beginning to change towards non-cash. At the same time, sellers are also changing, he told BusinessLine on the sidelines of a seminar recently.
Customers who used to go to those jewellers on account of cash acceptance are shifting to organised players, including Titan.
While cash continues to be the king, the percentage at Titan dropped to 30-35 per cent from over 40 per cent before demonetisation, he said.
There is improved consumer sentiment, which is good. “We want a reasonable growth that reflects the aspiration of the people,” he said. The company will offer new products and schemes to attract consumers, he said.
When the market is improving like this, market leaders like Titan tend to get greater preference. And, when times are down, people want to go to market leader because of the trust, he said.
On the June quarter financial results, Bhat said, “overall, we are on a good wicket. We had a good quarter in terms of bottom line but revenue growth was a little muted.
“We have been able to improve our market share both in watches and jewellery and eye wear. We also have experimenting with silk saree under the brand Tanera with two retail stores.”
Q1 sales rise
Titan reported a growth of 31 per cent in profit before tax at ₹487 crore (₹371 crore). The sales income grew ₹4,269 crore in June 2018 quarter from ₹4,002 crore last year, says a company press release.
The jewellery division recorded an income growth of 5.6 per cent in the first quarter.
The income from this division increased to ₹3,572 crore (₹3,381 crore). The watch business grew to ₹594 crore (₹517 crore), recording a 15 per cent increase. Its eye wear business grew 16 per cent to ₹132 crore.
Its other businesses comprising accessories, fragrances and sarees rose 32 per cent to ₹26 crore.
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