Rally in gold prices dents jewellery demand, any correction 'welcome': Titan

The company expects a price correction would boost volumes, as seen previously when gold duties were reduced.

The surging rally in gold prices, while boosting the gains for savvy investors who hold the safe-haven metal, has dampened the sentiment for prospective buyers, especially in the sub-Rs 50,000 category, noted jeweller and watchmaker Titan Company's management.

"Now some of it is us vacating price points because simply gold price goes up. The same product goes into a certain higher price band," said Ajoy Chawla, CEO of the jewellery division. "That is one part of the story. But in the lower price band, we are seeing some buyers being a little reticent."

Further, as a result of surging prices, customers have become more open to purchasing 18k gold. As a result, Titan has launched collections in 18k gold for the traditional customers. In the CaratLane brand, gold jewellery of 9k has also been launched. "There is early traction, I think more and more customers are going to be open to lower caratage simply because the price point has become quite a bit," added Chawla.

On the higher price bands, while there is buyer growth, Titan is seeing customers scaling down the complexity of product they are willing to buy. If earlier, they were open to buying a higher making charge product, they are sliding down a bit, looking for lightweight jewellery, lower caratage jewellery and jewellery with lower making charges.

Therefore, if gold prices pullback from their highs, Titan Company would "welcome" any correction, as more customers would enter the market. "Some evidence of this was seen when the Finance Minister had reduced duties on gold in 2024: many fence-sitters jumped in. So it is the best situation to be in. It also helps us improve margins on various fronts," noted the chief of the jewellery business.

"So actually we would welcome any gold correction, and any value or ticket size drop would be compensated by a jump in number of buyers," he added.

Titan Company reported net profit of Rs 870 crore for the quarter ended March 31, 2025, an increase of 11 percent from Rs 786 crore in the year-ago period.

The Tata-group company's consolidated revenue rose 20 per cent to Rs 13,477 crore in the March quarter as against Rs 11,257 crore in Q4FY24, boosted by strong sales in the jewellery and watches segments.

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