Titan Company estimates a 24% increase in Q3 revenue driven by festive jewellery demand. The significant growth in the jewellery segment, which generates 87% of total revenue, is projected alongside rising sales in plain gold and gold coins. The company anticipates challenges due to customs duty cuts but remains optimistic about overall performance in both jewellery and watches.
The Indian jeweller and watchmaker Titan Company announced on Monday an anticipated 24% increase in revenue for the third quarter, driven by strong domestic demand for jewellery during the festive season. This growth reflects a notable buyer increase in the jewellery segment, which constitutes 87% of Titan’s total revenue. In the same quarter last year, Titan had reported a 22% rise in revenue.
Typically, gold demand surges in India at year-end, aligning with the wedding season and major festivals like Diwali and Dussehra, which are considered auspicious for bullion purchases. As the world’s second-largest gold buyer, India implemented reduced import duties on bullion in July, enhancing price attractiveness and stimulating consumer buying.
Titan’s shares rose by 1.8% in early trading following the revenue announcement. The jewellery segment, encompassing brands such as Tanishq and CaratLane, experienced remarkable growth at 26% year-on-year for the quarter ending December 31, with plain gold sales rising by 24% and gold coin sales soaring by 48%.
Despite the positive growth, Titan had forewarned in November of an estimated loss of Rs 275 crore to Rs 280 crore in the third quarter due to customs duty cuts impacting previously acquired inventory. Moreover, the watches and wearables segment, featuring brands such as Fastrack and Coach, recorded an impressive 15% growth in revenue during the same timeframe.
Titan Company Limited, a subsidiary of the Tata Group, operates in the jewellery and watch sectors in India. It has established a significant presence, particularly with its jewellery brands, which account for the majority of its revenue. The festive season in India traditionally boosts gold demand, making it a critical period for jewellery sales. The recent reduction in gold import duties has further fueled consumer interest in gold purchases, aligning with seasonal buying patterns. The jewellery market in India is characterized by seasonal spikes in demand, with weddings and festive occasions being key drivers. As such, companies like Titan actively prepare for these upticks to maximize revenue. Titan’s proactive measures illustrate its commitment to capitalizing on market opportunities, especially during periods of high consumer engagement.
Titan Company’s projected 24% revenue growth for the third quarter highlights the strong consumer demand for jewellery in India, spurred by festive and wedding seasons. The company’s jewellery segment continues to thrive, characterized by substantial increases in both plain gold and gold coin sales. Despite facing potential losses due to changing customs duties, Titan’s performance in the watches and wearables sector also reflects robust market dynamics. Overall, Titan is strategically positioned to benefit from India’s cultural patterns of gold consumption.
Original Source: www.business-standard.com
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