Titan posts strong Q1; US jewellery sales rise ahead of tariffs

Titan Company Ltd had a huge growth in its US jewellery business in the April-June quarter as there was a build up before the tariffs, but current signals are quite volatile, company’s managing director CK Venkataraman said.

Talking to analysts on Thursday, Venkataraman said the company will avoid making any knee jerk reaction with respect to US pricing. He said the share of US to the company sales is just about 2%, so it’s not a “deal breaker” and wants to react calmly.

“We will see till August end what finally turns up. To finally administer the price that we think we should go with,” he said. Venkataraman, however, said the international jewellery business is becoming “bigger and bigger” with the recent acquisition in GCC (Damas jewellery business) which together with the US will account for 6% of sales.

“This calls for planning for a global supply chain which we have started to think about and explore, but there is no concrete plan to share at the moment,” Venkataraman said.

Incidentally, there has been a recent media report that Titan may shift some manufacturing to the Middle East for access to the US. The UAE has a 10% tariff much lower than India’s 50% tariff.

Titan on Thursday announced its first quarter results ending June whereby the company’s standalone net profit grew 33.8% year-on-year (yoy) at Rs 1,030 crore, while total income went up by 17.1% yoy at Rs 13,192 crore. The consolidated net profit grew 52.6% yoy to reach Rs 1,091 crore and total income went up by 20.1% yoy to Rs 14,778 crore.

The company said its jewellery business income for the quarter grew 19% yoy to Rs 12,797 crore (excluding bullion and digi-gold sales). The international jewellery business grew 49% yoy to Rs 554 crore. Titan said the international jewellery business clocked healthy double-digit growth in both UAE and North America regions achieving its first ever profitability.

The company also said its domestic watch business grew 24% yoy to reach Rs 1273 crore in the period under review, marking one of its best-ever quarters. The domestic jewellery business of Tanishq reached Rs 11,217 crore growing by 17% yoy.

Titan management told analysts that the recent introduction of nine carat gold jewellery in February during Valentine’s Day ’s allowed the company to operate in the sub-Rs 30,000 segment which it had to vacate due to high gold prices. This category has picked up and the company believes low carat gold jewellery, which is more on the adornment space and less on the investment space, will do well.