Titan Company Ltd. expects its jewellery business to fare much better in the second half compared with the first six months of the financial year on the back of higher demand during the festive season and weddings.
India’s largest branded jewellery maker by market value, in its third quarter update, maintained its full-year growth forecast for its biggest segment by revenue at 22 percent. That, according to BloombergQuint’s analysis, means the jewellery business needs to grow 28 percent in the October-March period.
Research firm Macquarie, however, expects a 30 percent growth for the jewellery segment in the second half. The company is expected to post strong EBIT margin expansion on the back Titan’s “Utsav” and “Heritage and Antique” gold jewellery collections, it said in a note.
The jewellery segment contributes more than 80 percent to the company’s consolidated revenue. Titan reported revenue from jewellery business worth nearly Rs 7,287 crore in the first two quarters of the ongoing financial year, the company’s filings showed. To meet the management’s expectations, it needs to post Rs 8,895 crore revenue in the second half of the 2018-19 fiscal, according to BloombergQuint’s calculations. The company reported Rs 13,265 crore revenue from jewellery sales in the year ended March 2018.
Titan reported a muted growth in the first six months of the ongoing financial year because gold imports declined and provisions due to its exposure to the IL&FS group.
The company said all its businesses grew in the seasonally strong third quarter. “Customer demand remained buoyant in the festive season of Diwali-Dussehra.”
Shares of Titan rose as much as 3.8 percent during the day after the company announced its growth outlook.
Online sales and smart watches are expected to drive the segment’s revenue in the third quarter, the company said in its update. Watches contributed 14 percent to the company’s revenues in the April-September period.
Titan is also looking to offer more affordable products in its eyewear segment to align it with the company’s “core brand”. Its frame distribution business continued to make progress, the company said.