Bengaluru: Titan Co. Ltd said business in the second half of fiscal 2016-17 exceeded its expectations despite demonetization, after the maker of watches and accessories struggled in the first half due to a jewellery industry strike against excise duty and a new rule requiring customers to disclose their permanent account numbers for purchases above Rs2 lakh.
Consumer sentiment and demand recovered significantly by the start of the fourth quarter of 2016-17 and sales were good across divisions in varying degrees, Titan said in a quarterly update filed with BSE Ltd on Tuesday.
The jewellery unit, led by the firm’s primary brand Tanishq, had a good quarter due to the “resounding success of the studded jewellery activation”, the Titan said.
The firm launched Rivaah, a range of wedding jewellery during the quarter and is going all out to promote the sub-brand under Tanishq.
Gross margins from the jewellery business are expected to be good in the quarter and enrolments and redemptions in the Golden Harvest Scheme are on track, Titan said.
Jewellery accounts for a major portion of Titan’s overall revenue. The firm opened 16 Tanishq stores in 2016-17.
The watches unit, which had been struggling after demonetization hurt sales in both trade and multi-brand retail channels, also had a good quarter, according to the BSE filing. The trade channel has recovered from the after-effects of the cash ban, it added.
However, the exports and original equipment manufacturing businesses within Titan’s watches unit continue to face headwinds, slowing down overall growth marginally. During the quarter, the company launched its slimmest ceramic watch, Edge Date, and also entered the fitness band market with an activity tracker launched under the Fastrack brand. Titan added 24 World of Titan stores and eight Helios stores during 2016-17.
Titan said a revival in the demand for sunglasses turned around overall sales at its eyewear division. But the closure of 12 Spexx stores dampened top line growth to some extent. It opened 59 Titan Eye Plus stores during the year.
During the fourth quarter, the company also opened its first handloom apparel store in Bengaluru’s upscale Indiranagar, marking its entry into the women’s wear segment, which is in the pilot mode for now.
Titan is optimistic about revenue growth in the coming year, though a high goods and services tax rate for jewellery might have some impact on its growth rate.