long term plan of titan
Titan looks to double its share of jewellery sales in India
India’s largest jewellery retailer Titan Co. Ltd plans to aggressively expand its business over the next five years as it looks to double its share of jewellery sales in the country, despite a regulatory clampdown on gold sales.
Titan has set a target of increasing its share of India’s jewellery sales to 10% over the next three-five years from 5% currently, managing directorBhaskar Bhat said in an interview.
The owner of Tanishq and Goldplus chains plans to open 15-20 jewellery stores every year over the period. It had some 180 stores of Tanishq and Goldplus at the end of the year ended March.
The company’s jewellery business, which generates 80% of sales, has been hit by regulatory measures such as strict control on gold imports and a ban on leasing gold. A widening current account deficit prompted India to announce a slew of measures earlier this year to curb demand for gold, which accounts for a large share of India’s imports. The deficit for the second quarter later narrowed partly due to lower gold imports.
The new rules will hurt Titan’s cash flow as the company is now required to pay cash upfront without getting any credit period for gold purchases. Earlier, it was allowed to enter into gold lease agreements of 90-180 days.
Sales growth has also dropped for Titan this year as consumers cut spending on non-essential items due to slowing economic expansion and high inflation.
Still, India remains among the top two consumers of gold in the world and demand for the metal is expected to increase over the next few years, according to analysts.
“It won’t be very tough for us to get back to our old growth rates because of the strength of the jewellery business over the long term. We only have 5% market share in jewellery so even to go to 10% would mean huge growth. Since jewellery is 80% of our business, it’s significant,” Bhat said.
Tanishq, Gitanjali Gems and other chains are among the few
India’s largest jewellery retailer Titan Co. Ltd plans to aggressively expand its business over the next five years as it looks to double its share of jewellery sales in the country, despite a regulatory clampdown on gold sales.
Titan has set a target of increasing its share of India’s jewellery sales to 10% over the next three-five years from 5% currently, managing directorBhaskar Bhat said in an interview.
The owner of Tanishq and Goldplus chains plans to open 15-20 jewellery stores every year over the period. It had some 180 stores of Tanishq and Goldplus at the end of the year ended March.
The company’s jewellery business, which generates 80% of sales, has been hit by regulatory measures such as strict control on gold imports and a ban on leasing gold. A widening current account deficit prompted India to announce a slew of measures earlier this year to curb demand for gold, which accounts for a large share of India’s imports. The deficit for the second quarter later narrowed partly due to lower gold imports.
The new rules will hurt Titan’s cash flow as the company is now required to pay cash upfront without getting any credit period for gold purchases. Earlier, it was allowed to enter into gold lease agreements of 90-180 days.
Sales growth has also dropped for Titan this year as consumers cut spending on non-essential items due to slowing economic expansion and high inflation.
Still, India remains among the top two consumers of gold in the world and demand for the metal is expected to increase over the next few years, according to analysts.
“It won’t be very tough for us to get back to our old growth rates because of the strength of the jewellery business over the long term. We only have 5% market share in jewellery so even to go to 10% would mean huge growth. Since jewellery is 80% of our business, it’s significant,” Bhat said.
Tanishq, Gitanjali Gems and other chains are among the few