Titan Company’s quarterly business update was released on January 6, 2023. The stock price fell 2% intraday on the same day. As per the Q3FY23 business update, watches & wearable segment reported sales growth of 14% YoY followed by jewellery segment sales rising 11% YoY. Eye care sales grew 10% YoY.
Quarterly growth rates in lower teens did not go down with the street. With Titan’s expensive valuations, investors expect high double-digit growth rates every quarter especially from the jewellery segment which contributes nearly 90% of total revenues. The jewellery segment reported sales of Rs 8,563 crore rising 37% YoY in Q3FY22, a year ago. Thus, sales growth of 11% YoY in Q3FY23 is satisfactory given the high base of last year.
According to the management, sales from the studded category moderately outpaced plain gold jewellery growth compared to the same period last year. Sales growth was driven by healthy new buyer growth in the festive period and higher value purchases in the studded category.
August 2020 gold price benchmark of Rs 56,000 is crossed yet again in January 2023. This might impact wedding jewellery sales. Titan’s wedding jewellery contribution to overall sales is lower than 20%. The company is more in casual and routine wear jewellery. Watches & wearables and eyecare segments have also reported strong sales growth on a high base. The company is expected to report strong numbers driven by the festive season and 111 new store additions in Q3FY23.
