Normalcy returning to business in Q2; jewellery division leads recovery: Titan
New Delhi: Tata group firm Titan on Wednesday said its business has been returning to normalcy led by recovery of sales in its jewellery division in the second quarter of the current fiscal.
The company had reported an unprecedented net loss of Rs 297 crore in the April-June quarter due to the COVID-19 pandemic.
"The company's return to normalcy on the business front has been progressing well with the almost complete lifting of restrictions in phased manner over last few months across the country, Titan said in its quarterly update.
It stated that there has been greater acceptance of the new normal amongst consumers and they have been getting back to many of their routine activities leading to a positive on the walk-ins to the stores and time spent in stores.
The company is now gearing up to gain well from the upcoming festival season which is expected to further uplift the mood of the consumers.
Titan said business through the e-commerce channel has grown significantly across all divisions.
Opening of malls have also helped, but the footfalls are still relatively low in these stores. As the sales are reviving at a healthy pace, the network expansion has also resumed, the company added.
Titan said the jewellery division did very well in the second quarter, with a recovery rate of around 98 per cent (excluding sale of raw gold), compared to the revenue of the same quarter in last year.
"The recovery rate in metros that have got impacted the most by the pandemic has been improving gradually. Non-metros seem to have recovered substantially and many cities have actually recorded growth compared to last year, it said.
Sales in September have been decent, despite the inauspicious period of 'Shradh', it said, adding that the festival season will commence about 15 days later in the current year.
The company said it continued to sell excess gold in its inventory and the quarter had a sale of Rs 390 crore of raw gold. This has helped improve the cash flow of the division significantly.
Titan said it added 14 Tanishq stores on a net basis in the current fiscal.
Titan said its watches and wearables division had a recovery rate of around 55 per cent in Q2, compared to the revenue of same quarter in last year, with a recovery of 70 per cent in September.
"E-commerce is leading the recovery with absolute growth but the trade channel continues to pose challenges primarily due to destocking.
The recovery rate for the business has been steadily increasing month-on-month driven primarily by increasing walk-ins to the stores. The conversion rate and ticket size (led by high-value customers) has been tracking higher compared to pre-COVID-19 levels," the company said.
Eye wear division reported a recovery of 58 per cent in Q2, compared to the revenue of same quarter in last year, with a recovery of 70 per cent in September.
"After a gap of 1.5 years, the division has again started selling its products through Amazon and Flipkart, which is seeing a good response... 15 stores were added while 42 stores were closed by the division in the year to date, resulting in a net reduction of 27 stores," the company said.
Titan said the recovery rate for the fragrances and accessories business was around 50 per cent, dragged down by slow recovery of the two of the biggest channels, trade and large format stores (LFS).
"LFS has been slow on account of the lower walk-ins into malls. Trade has been slow mainly on account of the tight financial position of most dealers. E-commerce channel has done well," Titan said.