Non-jewellery business witnessing slowdown: Titan

In an interview to CNBC-TV18, S Subramanian, CFO, Titan said that the company witnessed growth in sales and volume during the recent festive season, however its non-jewellery business is going through a slowdown.

"We had a decent run up to the Diwali season. We are nearly meeting our plans, but not entirely. It has not all been that great because gold rates continue to be very high. Footfalls have been better but could have been better," he elaborated. The company has added a number of stores in the past few quarters and expects them to boost its growth. Below is an edited transcript of S Subramania’s  interview on CNBC-TV18. Q: There were a lot of analysts, sending notes about how they have seen demand pan out in the festive season. What were your observations? How did you see volume growth pan out? A: We had a decent run up to the Diwali season. Sales were pretty decent, much better than what we saw in the first two quarters. I don’t think I would be ecstatic; we are nearly meeting our plans but not entirely. It has not all been that great because gold rates continue to be very high. Footfalls have been better but could have been better, maybe. Q: On comparison, does this festive season look a little less of a glitter? Do you think you had flat sales or do you see 5 percent higher sales on a like to like comparison? A: Clearly, there has been a growth. There is no problem on that. We had growth over the last year. Q: Are you talking about volumes or only value? A: Both. Particularly when it comes to jewellery, I think both. The issue is that we need to wait and watch what happens after this because last year post the festive season there was a significant crash in the revenues and volumes. For example, November last year was quite dull across the retail channel so the question therefore is how is it going to pan out this year? This year we are hoping it will be slightly better because the wedding dates are quite few, up to mid-December. One is hoping things will be better.

Q: Gold could face a double whammy from hereon. We are continuing to see higher gold rates. The rates are much higher for an Indian because the rupee is depreciating, does that hint that your post festival months (one and half quarters) could look less glittering? Will you actually see a year on year fall? A: Yes. I am concerned. I am not looking at a fall at this point because the purchase will increase our net worth quite significantly over the last two years. So, we have invested a lot in the number of stores that we have put up and therefore growth should come at least from there. The only point is whether we would go anywhere near what we wanted to grow or what growth we planed initially. There will be growth, clearly, maybe a little muted. Q: What about the non-jewellery segment that comprises 25 percent of your revenues? How is it fairing and would that be somewhat isolated or removed from this feared downtrend? A: Not really. Actually it gets affected as well as watches, very much a discretionary item and therefore there will be an impact on watches. There is a slow down there, but eyewear is different. We are doing quite well on that part because I don’t think it is connected to either festivals or weddings. Eyewear is insulated. Q: Which category of consumer discretionary is impacted? Is it the one with high value or is it a consumer down trading that you are observing? A: No. I think the high value, I don’t think the issue is there, the issue is more at the lower end. For example, if you buy our watches the impact would be more on the Sonata range.