I’m wondering there is no thread on Titan so far. Please let me know if there is an existing thread
The company has 3 main businesses - Jewellery, Watches, and Eyewear.
Watches (12.8% of Total Revenue)
Titan is the market leader in the Watches Segment. It started operations in 1986 and currently has around 60% market share. It sells mainly under 3 brands FastTrack, Helios, and World of Titan.
Revenue growth has been around 3.23% CAGR for the past 4 years. Much growth in this segment can’t be expected. It acquired Favre Leuba in 2011 to enter the luxury watch segment. But nothing much has been made out of it.
Jewellery (81.2% of Total Revenue)
This has been a consistent business driver for Titan. It sells under different brands - Tanishq, Zoya, Mia, Caratlane. It has grown from 30% of total revenue in 2002 to more than 80% in the last fiscal year. It has a CAGR of 20.5% in the last ten years. Operating profit margins are improving.
Thanks to Demonetization, GST and subsequent introduction of PAN which helped the organized players like Titan.
Eyewear (2% of Total Revenue)
Though it is a very small part of their overall revenue, Company is betting big on its eyewear business and planning to target 10 million customers in five years. But the growth has been not so great, with falling Operating margin.
The company has this to say regarding falling Operating Profit Margins:
“Company witnessed 16 % growth as compared to the previous year but profits are limited and that’s because advertising spends eats up margin. But that’s how you acquire new customers by making them aware that you exist.”
- Very few listed players to play on Consumer gold consumption
(opinion: Indian Gold consumption is not growing to reduce for the foreseeable future)
- Push for organized Gold Consumption
- This is a TATA group company, so not have to worry about Corporate Governance or management succession.
- Company is trying to stay relevant with trends (Acquired Caratlane - online jewellery seller mainly focused on working women)
- Regulatory risks - RBI has changed its stance on Gold import mechanisms multiple times in the past
- Not so great eyewear business- I feel it is hard to compete with online players like Lenskart(Subjective opinion)
It would be helpful if other board members can share their insights on Titan
Disclosure: Not invested. Looking for investment oppurtunity.