Titan sees jewellery biz boosting profits

Titan Industries, a Tata group company, is expecting its jewellery business to contribute more to its bottomline compared with watches over the next couple of years.

Bhaskar Bhat, managing director, Titan Industries, said the contribution of the jewellery business, branded Tanishq, in terms of its profit before tax is currently at 55% against watches’ 45%.
Bhat said that jewellery’s contribution to the bottomline could go up to 60% over the next two years, with margins being higher in the business.

“The fact that gold prices are rising is also helping us,” he said.
In terms of turnover, jewellery’s share is 70%. The jewellery business grew at around 30% in fiscal 2009-10 and is expected to increase to 35% in the new fiscal. The company is expecting to close the current fiscal with a turnover of Rs 4,600 crore, in which jewellery’s share would be around 3,500 crore, watches Rs 1,100 crore and other businesses Rs 150 crore.

The target for 2010-11 is 20% growth in value terms and 10% in volume terms.

Titan, however, is looking to give a push to its watch business by putting a thrust on the high end, having just unveiled a new sub-brand, Purple by Titan.

Also, with the markets depressed in the West (the company closed its two stores in the US — in New Jersey and Chicago), Titan is aiming for a deeper penetration into Asia and also South Africa.

The new Asian countries it plans to enter are the Philippines and Thailand.

“Titan is not taking a re-look at the US market mainly because the timing is not right, the cost of setting up stores is expensive and the domestic market has enough potential,” Bhat said.

The company will invest Rs 200 crore over the next two years.
It is setting up a watch unit at Pantnagar, UIttarakhand, which will raise its capacity to 15 million units from the present 12 million.
After Tommy Hilfiger and Hugo Boss the next licensed brand that Titan will market in India is FCUK.