Titan Company’s Q2 2020 results are a positive indicator for the jewellery industry. The company’s jewellery division has seen 98 per cent recovery (excluding sale of raw gold) in Q2, compared to the revenue of the same quarter last year.
The recovery rate in metros most impacted by the pandemic has been improving gradually. Non-metros seem to have recovered substantially and many cities have actually recorded growth compared to last year.
Additionally, sales in September were decent despite the period of Shradh. Sale of gold coins have also been high, reflecting the customer’s preference to invest in gold as an asset class. The company sold raw gold worth Rs 390 crore in Q2. The wedding jewellery segment did particularly well in the quarter.
The company is now gearing to gain from the upcoming festival season, which is expected to further uplift the mood of the consumers.
The Watches & Wearables division had a recovery rate of around 55% in Q2, compared to the revenue in the same quarter last year, with a recovery of 70% in the September month. It released its first full touch smartwatch, ‘Titan Connected X’ as well as a contactless payments watch Titan Pay in an a collaboration with SBI during the quarter.
“The Company’s return to normalcy on the business front has been progressing well with almost complete lifting of restrictions in a phased manner over the last few months across the country. There has been greater acceptance of the new normal amongst consumers and they have been getting back to many of their routine activities leading to a positive on the walk-ins to the stores and time spent in stores,” stated Titan in their BSE filing.
For both divisions, walk-ins are recovering month-on-month. The conversion rate and ticket size (led by high-value customers} has been higher compared to pre-Covid levels for jewellery as well as watches.
The brand also noted that gifting has become an important element to treasure social relationships post Covid-19.
E-commerce is leading the recovery with absolute growth but the trade channel continues to pose challenges primarily due to destocking. While the opening of malls have helped, footfalls are relatively low. Stores located in residential areas have fared better given the current work-from-home environment.