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Titan MD: Ban Boosts Consumer Spending
27 Feb
Summary
- Online betting ban frees up consumer funds, boosting spending.
- Gold buying volume flat, but grammage down due to high prices.
- Titan reports strong Q4 net profit growth driven by jewellery.
Titan's Managing Director, Ajoy Chawla, has highlighted several factors bolstering consumer demand. These include the recent ban on online betting, which has freed up approximately ₹10,000 crore monthly for consumers, alongside Goods and Services Tax (GST) rationalization and income tax slab relaxations. Increased government infrastructure investment also contributes to this positive economic environment.
Chawla noted a divergence in gold buying trends. While the number of customers purchasing gold remains stable, the actual amount of gold bought, measured in grammage, has decreased by about 9%. This decline is attributed to the significant surge in gold prices over the past six years. The broader industry is experiencing a similar trend, with grammage down by roughly 20%.
The company's jewellery division, encompassing brands like Tanishq, Zoya, CaratLane, and Mia, accounts for nearly 90% of Titan's total sales. This segment reported a substantial 42% growth during the December quarter. Overall, Titan achieved a consolidated net profit growth of 61% to ₹1,684 crore in the same quarter, with total income rising by 40% to ₹24,592 crore year-on-year.
Titan has also been active in strategic acquisitions, having acquired a 67% stake in UAE's Damas Jewellery last year. The company is exploring further acquisitions, contingent on the successful integration and scaling of the Damas purchase. Watches remain Titan's largest division by customer volume, serving approximately 16-16.5 million units annually.
