Titan charts out fast track growth plan

Looking beyond the success of its jewellery chain Tanishq, Titan wants to now focus on boosting its other entities like Titan Eye Plus

and Fastrack to achieve the 20 percent growth target set by it. Owned by the Tata Group and the Tamil Nadu Industrial Development Corporation, the company plans to reach a revenue target of three billion dollars (over Rs 18,000 crores) in the next 24 months. While the jewellery to fragrance manufacturer took two decades to cross a billion dollar mark (over Rs 6,000 crores), by the end of this fiscal, at constant forex rate, Titan should be able to become a two-billion dollars (over Rs 12,000 crores) enterprise. Company’s aim is to touch the five-billion dollars (over Rs 30,000 crores) revenue mark in the next five to seven years.

Its growth strategy is on the right track. Titan reported 11.6 percent increase in net profit to Rs 206.44 crores for the March quarter, on the back of strong demand for watches and a fall in material costs. Its total income from operations for the quarter ended 31 March rose 7.27 percent to Rs 2,803.38 crores. Watches revenue jumped roughly 20 percent to Rs 501.76 crores. Sales of jewellery, which accounts for 80 percent of Titan’s business, rose just 3 percent to Rs 2,157.33 crores. Titan’s fourth-quarter profit was boosted by lower input costs, which dropped 1.43 percent to Rs 1,646.3 crores.

Overall sales for FY2014 ended eight per cent higher at Rs 10,916 crores and profits were up two per cent to Rs 741 crores. Aided by a hopeful market, the stock, too, rallied 25 percent since May 6, when its annual results were declared, to Rs 325 as on June 4, 2014.

Jewellery business contributed 81 percent to the company’s topline in FY2014. And even company’s eyewear retail chain Titan Eye Plus, launched in 2006, though may not be in the same league as Tanishq, because of the smaller size of the market, but it is on track to break even this year. Last quarter same-store sales growth was 21 percent while overall growth was 35 percent. These businesses, along with the Fastrack range of accessories, are set to assist Titan achieve its 20 percent year-on-year growth target.

Meanwhile, Titan is looking at increasing its retail network in India and overseas and plans to double its presence to 2,000 stores in the country by 2019. Last year, the company with Tanishq jewellery and Titan watch brand changed its name from Titan Industries to Titan Company, to cater to new segments such as fragrances and lifestyle accessories like helmets and bags in a better way.