In sharp contrast to Street expectations, Titan Company has actually witnessed strong jewellery sales in the December 2016 quarter (Q3). Though jewellery companies were expected to be among the worst hit by demonetisation, strong festive demand has come to the rescue of Titan. In its Q3 update, the company has indicated that despite a slowdown in the initial days of demonetisation, jewellery sales have recovered strongly. Positively, sales in Titan’s modern retail and dedicated retail channels (exclusive stores) have rebounded to pre-demonetisation levels. However, watch sales in the trade channel (which forms half of this segment’s revenues) is yet to revive, given the higher proportion of cash transactions in this channel. “The company is in the process of introducing multiple modes of electronic payment in all its stores, including UPl, e-wallets etc. in order to provide customers with a plethora of payment options,” says the update. Overall, Q3 was one of the best festive seasons for Titan with both jewellery and watches businesses growing higher than management expectations.
Performance of the watches division was mixed in Q3 with World of Titan and Fastrack channels registering high single-digit growth. The trade channel, though, could take one more quarter to recover, believes the company’s management. Continued thrust and launches in the smartwatch segment will be a key growth driver for this business going forward.