Titan shines on better recovery rates

Titan shines on better recovery rates

Shares of Titan Company jumped close to 6% to Rs 1,268 on the BSE on Wednesday after the company said its jewellery business did very well in the September quarter (Q2FY21), with a recovery rate of around 98 per cent (excluding sale of raw gold), compared to the revenue of the corresponding quarter in the last year.
Titan’s jewellery division saw a recovery rate of around 98% (excluding the sale of raw gold) in the September quarter compared to the revenue of the same period last year. The walk-ins have been improving with conversion rates and average ticket size being higher compared to the same period of last year. Although, it’s worth noting here that the September 2019 quarter represents a comparatively low base wherein jewellery revenues had declined by 1.5% on a year-on-year basis.

The Company is now gearing up to gain well from the upcoming festival season which is expected to further uplift the mood of the consumers. The festival season will commence about 15 days later in the current year. The Company continued to sell excess gold in its inventory and the quarter had a sale of Rs 390 crore of raw gold. This has helped improve the cash flow of the division significantly.

Titan enjoys a dominant position in the leading lifestyle categories of organized jewelry and watches. Its medium-term growth outlook remains good, supported by various initiatives to drive higher sales of wedding/studded/fashion jewelry, a strengthening value proposition, and new customer acquisitions.
Titan also stands to benefit from higher market share as jewelry purchases shift to organized players and the unorganized segment becomes less competitive. However the company is not immune to the risks from COVID-19 impact which will be a drag on F21 operating metrics.

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