Titan’s business gains momentum in Q2-FY21; jewellery unit notes 98% recovery

The company that sells watches, jewellery and eyewear said it witnessed 98% recovery (excluding sale of raw gold) in the jewellery division in Q2 compared to the revenue of same quarter in last year despite the inauspicious period of ‘shradh’. Sale of gold coins were high reflecting customer’s preference to invest in gold as asset.

Bengaluru : Titan Company said sales across segments, especially jewellery, have gained momentum driven by unlock in the second quarter ended September helping its business to gradually return to normal amid Covid-19 outbreak.

“The Company’s return to normalcy on the business front has been progressing well with the almost complete lifting of restrictions in phased manner over last few months across the country,” the Tata-owned firm stated in a filing to the BSE.

The company that sells watches, jewellery and eyewear said it witnessed 98% recovery (excluding sale of raw gold) in the jewellery division in Q2 compared to the revenue of same quarter in last year despite the inauspicious period of ‘shradh’. Sale of gold coins were high reflecting customer’s preference to invest in gold as asset.

With most weddings postponed due to the outbreak, demand for wedding jewellery was affected in the pandemic quarter. However, the company noted better performance by the segment in the second quarter. Titan said it continued to sell excess gold in its inventory which helped improve cash flow of the division significantly.

The watches and wearables division had a recovery rate of around 55% in Q2 compared to the same quarter last year. E-commerce led the recovery but trade channel continued to pose challenges primarily due to destocking. Work-from-home culture in metros impacted sales of the division.

The eyewear division had recovery of ~58% in Q2 with a recovery of ~ 70% in September. The recovery rate for fragrances and accessories was about 50%, dragged down by slow recovery of the two of the biggest channels – trade and large format stores.

The quarterly update added that the company is hopeful of a good festive quarter which is expected to uplift the consumer sentiment.

Titan had reported 62% decline in revenue to Rs 1901 crore for the first quarter ended June, due to Covid-19 led disruption and shuttering of retail outlets in April and May.

It reported a loss of Rs 270 crore, as costs remained fixed but revenues were impacted by imposition of nationwide lockdown and low discretionary spends. A year ago, Titan had posted a net profit of Rs 371 crore during the first quarter.

“The recovery in business, particularly in the jewellery business is encouraging and we expect to get back to normalcy by the fourth quarter of this year,” CK Venkataraman, managing director of Titan Company, had said in the pandemic quarter.

Courtesy: Economic Times