- Plan to be icon in 2020 from leader in 2015
- Hesitation to provide pan card has reduced in last 4 years; Pan card for above 1 lakh purchase should not be an issue for atleast1 year
- Opportunities and drivers: Rise of career women, rise in small town aspiration, pressure on black money creating level playing field, high value diamond jewellery, network expansion
- Margin rationalisation made company more competitive
- Thrust will be on premiumisation through diamonds and high ticket purchases
- Currently there is no excise on gold and VAT is 1%. Due to GST the tax will increase and hence exchange value of jewellery will reduce
- Industry size – Gold Rs 2100bn, diamond Rs 400bn
- Titan market share – gold 3%, diamond 7%, overall 4%, huge potential to grow share
- Industry size as per use: daily wear Rs 700bn, wedding rs 1500bn, occasion rs 300bn
Titan share: daily wear 8%, wedding 1%, occasion 3%
- Market also divided into adornment, status, savings. Strategy of titan: Dominate adornment, play in status, participate in savings.
- Competition in South which is majorly a savings market is very high. Gold Plus in savings segment has not made acceptable levels of EBIT and return and will not be on focus.
- Risks because of gold prices, government’s view on gold imports remain
- Earlier high proportion of gold was hedged. Now hedge to spot is 50:50/ The management may change contribution of spot to 80% if required
- The advertising cost in watches was lower by 14-15cr in FY15 as against FY13/FY14 as the business matured
- Prices in watches never come down unlike electronics and other products
- Will renovate around 70 stores. Historically renovation increased sales by 5-15%
- Mechanical watches are back and lend a premiumness to the category and Titan will exploit this opportunity
- Smart watches have revived interest in watches category. The company will participate through R&D of own product or selling other international brands through its multi brand outlets
- Strategy to focus on share of wallet as against share of voice earlier, as lifestyle changes.
- Will open 70 new stores in middle India
- Strong innovation pipeline like Celestial time. Edge dual time
- 351 stores, 3.6 bn turnover, 1.1mn buyers
- Objective – Rapid scale up, double buyers in 3 years, double fast track volume in 3 yes
- Investments in frame manufacturing, R&D, regional lens labs, store renovation, 10 new company stores
- Outlook: Rise of online players and now they are also moving offline like Lenskart, National players are growing slow, Regional players are driving expansion
- Growing very fast, momentum to continue, make in India to help
- Precision engineering division will be made a subsidiary and capitalized for better focus
- Company will invest in building new capabilities, increase business with existing suppliers, system integration with HAL for defence, establish sales and service centres in Europe and China
- Huge potential in retail across middle India (300+ towns). Identified 75 and will go to 35 this year
- Unified Loyalty program has 8mn customers and the data will be used for analysis.
- A challenge to the business comes from snacking – buy many small cheaper items instead of a big expensive one to satisfy shopping urge
- E-commerce websites with deep discount are a competition. Company sells watches on major e-commerce websites. But doesn’t believe jewellery is a multibrand category like watches and will not sell jewellery on major e-commerce websites. Will launch an exclusive website.
- Capex of 1.5-2bn every year. This year the focus will be on renovation, opening of retail stores and manufacturing. The allocation to jewellery will not change significantly
- Not actively searching for inorganic growth. But open to attractive opportunities. Will acquire for skill and not scale.
- Dividend payout to be around 25-30%