Expect Rs 1K cr in FY10 sales from watches segment: Titan

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Titan Industries is targeting 35% growth over the next two years, reports CNBC-TV18's Vineetha Athrey. The company is focussing on watches and jewellery and is planning eight new watch collections next fiscal. It expects a turnover of Rs 4,700 crore this year, of which the jewellery segment would contribute Rs 3,500 crore.

The company will add 15-20 jewellery stores next fiscal. Of this, two large format stores are expected in Mumbai and Kolkata early next fiscal.

It is planning eight new watch collections next fiscal, of which three will target the youth. It expects production capacity to go up from 11 million to 18 million watches in the next five years. The watchmakers new assembly plant in Pantnagar is likely to open in the next three months, and is expected to increase capacity to 15 million watches.

In the quarter gone by, revenues rose 30.25% to Rs 1,333.8 crore as against Rs 1,024 crore in the same period last year. Operating profit margins stood at 8.06% as compared to 5.79% while profit after tax came in at Rs 78.35 crore versus 23.52 crore.

First Global has upgraded the stock to moderate outperform while Motilal Oswal and Angel Broking are neutral.

Bhaskar Bhat, Managing Director, Titan, says diamond jewellery currently accounts for 25% of sales. He plans to scale it up to 40% in the next five years.

In watches, he sees rapid growth in the Tier II and Tier III cities. "Growth was high in the last quarter due to the festive and wedding season. We are seeing that sentiment continuing even in January, even though growth rates are not high."

Bhat has an FY10 sales target of over Rs 1,000 crore for the segment. "Titan and Fast Track are higher margin brands. Fast Track is likely to contribute over Rs 300 crore." 

He sees a decline in demand for watches in Dubai and Singapore. "We operate in 28 markets, so on the whole there won't be any impact. But the growth rates of about 15% that we were getting earlier have come down."

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