GST will level the field and formal sector will benefit: Titan MD Bhaskar Bhat

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26 Aug, 2025 12:21

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Critics of Titan have often asked if the company should rename itself as Tanishq as sales of jewellery today account for a large part of its sales. But as you set foot into Titan's headquarters and the focused approach that it has on different categories, you realise the criticism is not rooted in fact. In an interview with Moneycontrol's Malini Bhupta, Titan's Managing Director Bhaskar Bhat talks about the company's plans in FY18, the categories they will focus on and how they are all about lifestyle. Edited excerpts:

This year is going to be better. We had begun the year confronted by a 43-day strike in the jewellery business, which forced us to close stores. The effect of demonetisation was devastating on unorganised players. Consumers have realised that Tanishq's way of doing business is the right way of doing business and many are migrating to organised sector players. In a small way it also affects watches as there are unorganised players in watches, too. But over the last 10 years, a lot of foreign companies are operating in India.

We are a lifestyle company and not a jewellery or watch company. We have chosen three categories and our job is to excel in each of them. We are using our competence for new areas of opportunity like fragrances and eye wear. We have chosen categories where unorganized play is big. Our watch business is bigger than Trent in value and profit terms. We are a Rs 13,000 crore company and jewelry itself is Rs 10,000 crore. But the other business is Rs 3000 crore and how many companies do you have in any category of that size?

The name of the company is Titan Company, so why should we change the name. Watches touch 14 million customers a year and jewellery touches 2 million. The number of consumers who buy watches is seven times more. There is a certain size for an industry. Unless you separate all of them and make them separate companies. Market share is 4.5 percent for jewellery and 65 percent in the watches.

If you look at the sari business it is much like the jewelery business and is unorganised. There are many categories where there are no organised players and no scientific way to assess what you are getting.  Our research told us that while sari is not the in-thing, women have a longing to wear saris. It is a complex affair to buy a sari. Our research told us that here is a category to be explored and exploded. We have a huge customer base of women and they like our products. We have no competitor to Raga. We are clear about our categories. So long as you excel, you create excitement in the company. If you go to a start-up you won’t ask this question. I am saying that we are simply customer-oriented and our loyalty programme has 10 million members.

We keep looking at unorganized sectors where lifestyle products are manufactured and sold. If we find the opportunity is big enough, then we look at the category. Research tells us people are investing in themselves – like wellness, fitness, leisure travel etc. Investing in the self is a higher order drive. We choose categories where you can serve millions. Also, women have become a segment by themselves.

Typically, one would hear women are making decisions for family but now they are a force to reckon with, independent of the family. They are making their own choices, influencing and advocating. Our understanding is better than others of this segment.

We believe the fragrance market will explode provided the marketer brings value. Eye wear is still at Rs 400 crore as a category and saris is again early days. We have two years and we are still experimenting. We are not a retailer. We are a category player and we dive deep into it. Just special occasion wear saris is Rs 24,000 crore.

About 12 women from our factory in Hosur went to pick up saris after completing 25 years. They chose Bhagalpuri Tussar. We opened up the process of exploration to the whole company. We told people within the company to dream of categories that we could enter and we will evaluate and fund good ideas. The project is called “Ignite.” I had it as an idea for a long time but 700 ideas came. It got filtered to 14 and then three. At every level the ideas got filtered down by a hard-nosed jury. The jury had people like CEO of Tata Tea, a non-business head at Titan, and a professor from IIM Bangalore. Sari emerged as one of the ideas through Ignite.

You should go back to our watches experience. India is no longer a single market. Watch business started as a single brand, now we have multiple brands. That is how we have a 65 percent marketshare. The point about brands is that you cannot stretch brands across geographies. For instance, Mia is targeted at working women. The idea is lighter and simpler with lower price points. Tanishq is the jeweller. Zoya is an exclusive design with diamonds.

We think it can only get better. Our focus was productivity for people and by people. At the start of the year, they took lower hikes than industry standard, but we made it up with a bonus towards the end. We expect jewellery sales to grow 2.5x sales in five years.

We expect GST to be 5 percent on jewellery. The biggest change that the GST will bring about is that the formal sector will benefit. And the jewellery industry is dominated by the informal sector. Government will like to formalise the entire jewellery industry so that the generation of unaccounted income is eliminated. Bringing them under the tax regime and follow practices of any other industry will benefit those who are formal players. A higher GST rate would make jewellery more expensive to the investment-oriented customer. If taxation is high and it is not subsumed in the price of gold then the investment angle will disappear.

I think the field will become more level. The beauty of this system is that every member of the value chain has to cheat, for the system to go back to the earlier system. Everybody will have to fall in line.

We are already getting queries from trade asking us what will happen to the stock. I think companies have to make choices on whether they will pick up the difference in tax or not. Which means reimburse the GST component in the stock. If I am giving 25 percent margin to the dealer and if I have sold him a product to him at Rs 750, it has the tax component in it. But at the consumer’s end the tax is on Rs 1000. The dealer will be forced to pay 28 percent but the question is who will bear the difference. If we are not willing to pay then dealers will not buy new stock. We have to make an assessment and see if we are willing to pay the difference as it will be a large sum of money. They will seek compensation for the stock leftover on June 30.

A slew of new products. Jewellery will become a bigger wedding jewellery player. Watches will be a bigger and smart watch player. Company will become more active online, whether it is influencing people digitally or making people buy online.