Titan sales falter post demonetisation

Titan’s business verticals suffered a drastic slowdown for a few days immediately after demonetisation. Sales in the trade channel of its watch segment, which contribute about 50 per cent of total sales, have taken a hit and are yet to recover as most transactions in these outlets have been on cash.

Titan is known for its Tanishq jewelry and watches. The company is in the process of introducing multiple modes of electronic payment at all its stores. The watch division is the second biggest revenue generator for Titan, contributing about 18.5 per cent for the six months ended September 30. Jewelry makes up about three-fourth of the total revenue.

This season Titan had one of its best festive seasons in the last few years. There were strong performances in both its jewelry and watch divisions. Tanishq recorded like-to-like sales growth of 40 per cent.

Non-cash payments are 40 per cent of Titan’s sales while cash is around 60 per cent. But as compared to smaller jewellers in the unorganized sector, Tanishq has a higher ratio of purchases made using credit or debit cards. Even among those who buy using cash, Titan feels a huge proportion of purchases by its customers is done using money that can be accounted for. But the company expects a pick-up from financial year 2018 though there may be an impact on the third quarter of financial year 2017.