Titan lost some lustre in Q4 as profit fell over 14 per cent with sales declining 1.5 per cent. While the jewellery strike has hurt the industry hard, expectations are Akshaya Tritiya may set the ball rolling on sales.

Speaking to Bloomberg TV India , Titan Managing Director Bhaskar Bhat says consumer sentiments were dampened after the lowering of the PAN card limit, while sales suffered due to closure during jewellers’ strike. However, the company is targeting 15-20-per cent growth in the jewellery business in FY17 with gold harvest and other initiatives, he said.

The jewellery as well as watches segments have seen a big cut in terms of the profitability. Obviously, there is regulatory as well as the strike concerns as far as the jewellery business is concerned. Can you take us through the key highlights of FY16 Q4?

The fourth quarter has been disappointing and the reasons are many. The continuing reasons are of course the consumer sentiment and certain environmental pressure on consumers not spending sufficiently. And the larger reason during the quarter was the PAN card limit being brought down but that is settling down — it impacted sales in jewellery in the early part of the quarter. But last month (March), we were impacted by the continuing closures of Tanishq and Gold Plus stores on account of strike in the jewellery industry. So, that was a real loss of sales and it continued in April as well. Overall, the year has been disappointing. The combination of factors are: the first eight months there was no golden harvest in jewellery, so that was a real drop; then the regulatory impact of the PAN card and thereafter the strike. In watches, weak consumer sentiment was leading to weak growth and our inability to compress our cost as well as certain absence of products below ₹2,000 in brand Titan. We have grown, however, quite well in the watches in the higher price segment. So, that is the direction in which we are headed — the premiumisation journey that we had started. All new products have done well. Network expansion has gone well. Eyewear continues to do well. We have had both same-store growth as well as overall growth in that business. And we are looking for aggressive expansion in that segment. In the current year, the jewellery will continue to grow top line as well as the network. Eyewear will aggressively grow network. And watches are in a correction phase in terms of the fixed cost especially as well as in the innovation of smart watches and new product innovation at higher price. Overall, we see a good year, but we are cautiously optimistic.

The gold harvest scheme was absent for eight months. Now you’re back in it. What kind of growth are you looking at?

We are targeting about 15-20-per cent growth in the jewellery business because of three things. One is what we see the market to be in the current year — the initiatives that we have undertaken in wedding segment as well as the new product introductions. We have had great success last year. More importantly, the gold harvest scheme is available all through the 12 months.

You slashed making charges in the initial part of the last year. Has the impact of that completely waned? And if not, by when will it wane? Will you revive the earlier making-charge rates?

No. The cut was strategic and it continues. We were non-competitive at certain price points, especially the entry price points, and because of that we were keeping consumers away. But with the cut we introduced in March 2015 and continued since then, it has brought back our customers. So, there is no reversal of that. In fact, if anything, thanks to introduction at plain gold jewellery products at higher making charges like Divyam, which is the wedding collection, we have even seen improvement in margins despite taking the cut.

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