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A moderation in gold prices followed by a period of stability could encourage consumers who deferred jewellery purchases due to high prices to return to the market, according to Titan. The company is also focusing on increasing customer acquisition to sustain growth in its branded jewellery business.
The jewellery major, whose portfolio includes Tanishq, Mia and Zoya, has guided for a margin of around 11 per cent for the current fiscal year, its top management said during the latest earnings call.
"If gold prices remain corrected and stable, the chances are we will see many more customers coming into the market, especially those who had stayed away," Titan Managing Director Ajoy Chawla said during its post-September quarter earnings call.
Gold prices underwent a significant correction in October, declining by around Rs 7,300 per 10 grams from Rs 1,49,300 on September 30 to approximately Rs 1,42,000 by the month-end, marking a fall of nearly 5 per cent.
The downward trend continued in November, with gold prices in the national capital falling by Rs 800 to Rs 1.45 lakh per 10 grams on November 11, registering a second consecutive session of decline.
In international markets, spot gold traded marginally higher at USD 4,047.71 per ounce, while silver gained nearly 3 per cent to USD 52.86 per ounce.
Titan believes a stable gold price environment could encourage consumers who had deferred purchases due to affordability concerns to return to the market. This could support customer acquisition and buyer growth, even as the contribution of higher gold prices to average transaction values begins to moderate.
"I would bet on much healthier buyer growth than what we have seen in the past, perhaps compensating for some of the ticket size-related issues that you might be anticipating because gold prices remain subdued," Chawla added.
The company is expanding its affordable jewellery range, with a sharper focus on products priced below Rs 1 lakh and Rs 50,000. By offering a wider variety of designs and products across these price points, Titan aims to attract first-time jewellery buyers and younger consumers.
"I would say new buyers typically enter in the lower price segments because they are below Rs 50,000, or below Rs 1,00,000, and that is where you will start seeing the spurt whenever gold prices correct or whenever we are able to attract that customer with appropriate products in our catalogue. It could be across Mia, CaratLane, or Tanishq," he said.
Titan's jewellery division CEO Arun Narayan said the company is also widening its portfolio across lightweight designs, 18-carat gold and 14-carat studded jewellery.
"I think in the long run, it will help us be accessible; it will help us gain customer share, help us gain buyer growth," he said, adding these initiatives were aimed at making jewellery more accessible and providing consumers with greater product choices rather than responding to short-term movements in gold prices.
Alongside these initiatives, Titan is focusing on its gold exchange programme, increasing its store footprint and renovating existing outlets to strengthen customer reach and drive footfall.
"I believe we should brace ourselves for continuous improvement or increase in competitive intensity. And it would be very theoretical to say whether last year was more or this year is more. Assume it is going to keep increasing," he said.
On profitability, Titan remains committed to maintaining its jewellery EBIT margin at around 11 per cent in FY27, despite increasing competitive intensity and volatility in gold prices.
"There are conflicting opinions that gold might again start its upward journey. Given all those environment, we are saying that it looks like that we can confidently deliver margin which is anchored around 11 per cent, and we do not want in a hurry to either change that," said Titan's CFO Ashok Sonthalia.
Source - PTI
