Titan on course for FY24 as well as FY27 plans: MD

CK Venkatraman, MD, Titan, says FY23 has been exceptional in terms of sales growth, profit margin expansion, market share gain, customer experience standards, every which way and therefore we are totally on course for our FY24 as well as FY27 target.

Venkatraman give a marathon analogy and says “when you are running, if you take 20 quarters in five years and two km equivalent to a quarter, in some two km stretches, you do better than planned and therefore you get a reserve of that and you use that reserve to slow down a little deliberately. The analogy I would use is investing the money that you have earned in things that you need for sustaining that run and therefore you slow down and increase your energy. But at the end of that, four segments, which is one year in this case, we are on course for that FY27 plan.”

How are you feeling after your quarterly performance? Everybody is saying that Titan business is slowing down. Is it true?
I am feeling very good and super excited about a year that has gone exceedingly well. We always take a slightly longer-term view of businesses as opposed to quarter on quarter. We had announced in May 2022 a five-year plan for most of the businesses of the company, 2.5x for jewelry, Rs 10,000 crore by FY26 for watches and wearables, many thousands of crores for international, 1000 plus crores for Taneira and all that.

When I look back at FY23 's actual achievement, we are very much on course for that. When you are running, if I take 20 quarters in five years and two kilometres equivalent to a quarter, in some two kilometre stretches, you do better than planned and therefore you get a reserve of that and you use that reserve to slow down a little deliberately. The analogy I would use is investing the money that you have earned in things that you need for sustaining that run and therefore you slow down and increase your energy.

But at the end of that, four segments which is one year in this case, we are on course for that FY27 plan. That means we are on plan. So, I am very satisfied. All of us are super excited to be where we are in May of 23.

While you are catching your breath and conserving energy for the next leap forward, just in the very near term, has there been a moderation in demand in March because of the volatility in gold prices and did that continue in April as well?
It went a little into the first half of April as well, what with the gold price volatility and the slowdown in demand as a result of that. But I am just restating that these timeframes are way too short. While the markets look at that, we also keep telling the market to look at it, because the valuation of a company like Titan or any company is done with a certain zoomed out view of its prospects in the near term and not quarter by quarter. That is why I am saying that FY23 has been exceptional in terms of sales growth, profit margin expansion, market share gain, customer experience standards, every which way and therefore we are totally on course for our FY24 ambition as well as FY27 ambition.

FY24 is a year of rest or year of consolidation. What gives you the confidence that you are still on course for your FY27 ambition because you have a little bit of volatility and a little bit of slowdown to deal with?
The first marker is the first year out of the five years in this five-year journey. How well have we done? Have we done as per the milestones that we had put in for March 31, FY23? We have done it. The four quarters were different while we reached the end, but we reached the end and the dispersions across the four quarters were not so dramatic for us to…, it was not a volatile four quarters. The four quarters were around the average of the mean. So, there is no doubt at all in our minds that we are on course, that is point number one.

Point number two, the enabling conditions on which we developed a five-year strategy, those enabling conditions are very much there, notwithstanding the slowdown in the first fortnight of April. It is one of 26 fortnights in a year and we cannot be getting worked up about one fortnight which is slow because we have in our hands a huge market share opportunity in virtually every business where we operate to go after share gain and actually make up for whatever lost ground in the first fortnight of April.

So, the customer segments are with us and the explosion in the top two customer segments is expected to be $5,000 per capita. That is going to be relentless even if a little bit on and off from a month-on-month point of view. The market share gains opportunities are very much there. The formalisation acceleration will continue. The assets on the ground in terms of stores, people; the Bharat opportunity.

I just came back from a deep trip in Bihar and every small city in Bihar I go to, it just jumps out that there is the opportunity for Titan Company in every one of those cities. Therefore, the enabling conditions continue to exist. If they change, obviously, the trajectory can change, but they are not here to change for a while.

There was a huge tailwind for Titan and it could be centered around three pieces; number one, Titan brand with better designs, market share gain and the promise of a better experience and a promise of 24 carat gold. The buyer was told what he is buying that led to significant change in the entire jewellery market. But your peers have adopted this template. So, while it was very easy to gain market share when this initial change was adopted, do you think increasingly it will be tough to keep on gaining market share?
Obviously, the overall competitive intensity has increased in the last three to five years but what is also simultaneously happening is that the total share of the organised sector within the jewellery industry is dramatically increasing. In every city, in every town, people are wanting to buy brands. Some of them will end up buying brands, which are our competitors, some of them will end up buying Tanishq.

Therefore, the overall opportunity for the branded segment is exploding and we cannot at all underestimate the power of the Tanishq brand. We are only talking about purity when we are talking about 24 carat and all that but there is a brand, there is a desire to own and wear, to be seen owning and wearing a Tanishq brand, which is very different from somebody else having a design which looks like this and somebody else having an equally pure product.

The customer experience that we have created systematically over the last two decades of really delighting customers, creating fans, building deep relationships with millions of customers across the country, that is not an easy thing to replicate at all for anybody, whatever be their deep pockets, whatever be the scale of their ambition.

What about the watches and what about the eyewear businesses? What is the vision ahead for those?
The watches and wearables business had shared a very ambitious dream of 10,000 crores of MRP by FY26 and we are on course for that. In fact, we crossed the Rs 5,000- crore mark; in FY23, the wearables business has taken off. We have done many things right in the last 24 months and in the last 12 months including reorganising, getting in talent and all that. The results are very much there to show and stay.

We are now a prominent name in the smart wearables category and the sales growth has been explosive in FY22 as well as FY23. In the watches business, the Titan brand particularly has been really scorching the pace in the department stores, for example, where all the international brands sit. Titan is the number one brand in the department stores and is continuing to grow at a fabulous pace, even in the other channels like Helios and the World of Titan.

We believe that the fashion analogue watch represented by the brand Titan is a very powerful accessory. It is a very powerful symbol of emotional relationship. It is a very powerful symbol of status and we are pushing all these buttons and the results are very much there in a FY22 in Covid in FY23 post Covid to show and to see.

We are really pushing the premium journey of the Titan brand going into beyond Rs 50,000, Rs 100,000 all the way up to Rs 200,000 price points through product innovation, marketing, retail transformation and all that and super excited about the watch business as well.

As far as the eye care business is concerned, the last two, three years were spent substantially in transforming the operations of the business and you will see quarter on quarter results barring a Q4 of FY23 where we deliberately decided to invest in certain parts; in employees, in the company stores as a leap forward in FY24 and in partners barring that, every quarter we have delivered exceptional results.

Now, in FY24 and FY25, we are focusing big time on growth and the market share here as well is very, very low. It is at best in the high single digits and we are unique in the part of the business where we play so watches and wearables and eye care, not only are the dreams big, but the positioning is very, very strong.