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Tata group company Titan has entered into an agreement to purchase a majority stake in Damas Jewellery, marking its biggest acquisition after CaratLane. The acquisition makes Titan one of the biggest jewellery retailers in Middle East and Gulf Cooperation Council (GCC) countries.
Titan has limited presence in the GCC region till now, despite the region hosting a large Indian diaspora. As of FY25, the company’s jewellery unit had 15 stores. Comparatively, Kalyan Jewellers had 36 showrooms in the Middle East and also derived higher revenues compared to Titan from overseas.
Damas will scale up Titan’s presence in the Middle East. The Dubai-based company has 146 stores across the six GCC countries. Importantly, Damas’s long historical background in the region will help Titan gain greater acceptance among Middle East consumers. Preservation of Damas’s identity and legacy is, therefore, important.
Note that the Middle East is one of the world’s largest premium jewellery markets. If handled well, the acquisition can diversify Titan’s jewellery business and add a significant growth lever to the company. Currently, Titan’s jewellery business derives most of its revenues from India.
“The acquisition not only creates a significant new global opportunity for Titan, but also enhances Titan’s overall position in the jewellery market in the GCC countries and brings in multiple synergy benefits,” said CK Venkataraman, managing director of Titan, in a statement.
Encouragingly, Damas is growing at a decent pace and has delivered stable profit margins in recent years, show recent data compiled by analysts. Together, Titan and Damas can look to extract better economies of scale. Damas’s revenues are twice the size of Titan’s FY25 international jewellery revenues.
Scale can yield exponential benefits, reflecting in better earnings for consumer companies. Consider the example of a stock in the limelight -- Eternal. Shares of the food delivery and quick commerce company surged 10 percent in Tuesday's early trading after it reported strong revenue growth and a reduction in operating losses in its new business (quick commerce).
As quick commerce gains scale and Eternal finetunes the business, analysts expect an improvement in overall earnings of the company. Even so, much depends how much time it takes for the quick commerce business to improve its profitability, cautions our research team. You can read their Q1 results analysis of Eternal here.
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