What the Q3 updates by Titan, Kalyan Jewellers tell us about consumer sentiment

Titan Company Ltd’s shares touched a new all-time high on Friday after the Tata Group firm said it recorded strong demand across its consumer businesses during the third quarter and clocked 36% year-on-year revenue growth.

Meanwhile, another leading jewellery chain Kalyan Jewellers India Ltd also reported robust revenue growth for the October-December period, helping prop up its shares.

Titan, the watches and jewellery arm of Tata Group, crossed a valuation of more than Rs 2.31 lakh crore as its shares jumped to a record high of Rs 2,687.30 apiece on the BSE. The shares later cooled off to trade flat around Rs 2,600.

Shares of Kalyan Jewellers climbed as much as 4.3% to Rs 74.90 apiece, before easing to Rs 72 levels on the BSE.

The two companies said business grew in the third quarter thanks to festive sales during October and November.

Titan’s jewellery sales jumped 37% during the quarter, as both walk-ins and customer conversions rose from a year earlier. New buyer growth was higher than total buyer growth, and ticket sizes were 15% higher than pre-pandemic levels. The contribution from Tier-1 towns improved and was close to pre-pandemic levels.

The watches and wearables division recorded 28% revenue growth and saw strong growth momentum with multi-brand channels, both online and offline, growing. Sales from trade and large format stores clocked higher growth followed by retail channels. Tier 2 and Tier 3 towns did better than metros, Titan said.

The eyewear division’s strong 27% growth was driven by sunglasses and frames with good demand uptick also seen in international brands. The online division under Caratlane also achieved robust growth in sales, Titan said.

Kalyan Jewellers

The company said consolidated revenue growth for the third quarter was about 17%. It witnessed strong momentum in footfalls and revenue over the past four quarters. The positive traction continued during this festive season on the back of further easing of COVID-related restrictions across India and the Middle East, further supported by increased levels of vaccination and continued buoyancy in consumer sentiments.

Kalyan posted revenue growth of over 15% for its India operations during the quarter despite a strong base a year earlier. Gross margin improved sequentially and is nearing the pre-COVID levels. Key drivers for margin expansion have been improvement in both studded share and share of revenue from non-south markets, the company said.

In the Middle East, Kalyan witnessed significant improvement in customer sentiment during the quarter, resulting in a revenue growth of over 22%. This growth was entirely same-store-sales driven since it did not add any showrooms in the region during the last 12 months.

For the first time since the onset of COVID-19, a majority of Kalyan’s showrooms in the region recorded revenue higher than pre-COVID levels. The region contributed 15% to its consolidated revenue.

Kalyan’s online jewellery platform, Candere, recorded a revenue growth of over 35% during the quarter.

During the recently concluded quarter all our showrooms across India and Middle East have been fully operational, as was the case during the same period in the prior year.

However, Kalyan also added a note of caution in its outlook. “We are closely monitoring the evolving situation on the ground in relation to the spread of the Omicron variant,” it said, referring to the new coronavirus variant that has led to a surge in infections in India and across the world.