Titan Company expects a growth deceleration in the second quarter as the absence of Navratri in the period shifted consumer demand. While retail expansion remains strong with 78 new stores added, high gold prices and promotional costs are weighing on jewellery profit margins. Investors are waiting for the official financial results on November 5 for clarity on volume trends.
Titan Company is entering the second quarter with a moderated growth profile, largely driven by the specific timing of the festival season this year. The absence of the Navratri festival during the July-September quarter has resulted in consumer spending shifting into the following months, which has impacted the company's domestic jewellery sales performance.
Analysts have projected that domestic jewellery sales, excluding bullion, may grow by 30 percent compared to the same period last year. This is a noticeable retreat from the 38 percent expansion the company reported in the June quarter. A key factor behind this trend is the cooling of gold price inflation, which has eased to 45 percent, down from 55 percent in the previous quarter.
Despite this slowdown, the jewellery segment continues to maintain resilience. The overall jewellery business posted a 21 percent growth, with the CaratLane brand delivering a strong 32 percent increase. Studded jewellery remains a preferred choice for consumers, supported by focused marketing campaigns, while plain gold jewellery also saw a 20 percent increase in demand.
However, the company is facing some pressure on profit margins. Reliance on gold exchange programs, where customers trade in old gold, combined with the current environment of high precious metal prices, is expected to compress jewellery profit margins to around 10.7 percent. This represents a minor year-on-year contraction that investors may want to track.
Titan continues to follow an aggressive strategy of physical expansion. The retailer added 78 net new stores during the quarter, bringing its total network to 3,758 locations. Beyond its core jewellery business, the company saw steady performance in other categories. The watch division is expected to record 15 percent growth, while the eyewear division is showing a recovery in profitability, with margins projected to rise by 350 basis points to 9 percent.
Investors are now looking toward the official financial results, scheduled for release on November 5. The key monitorable will be whether the company can maintain volume growth despite the high price environment and how effectively it manages its operational costs during the upcoming peak festive season.