Good afternoon everyone. How are we doing? Waiting for lunch? Yeah, so okay. I will not be very – you know, I will not take much time. Let me start.
You see, no Titan event will be felt complete without this timeless jingle. And I thought it appropriate. Before me all the speakers who came, they basically talked about some part of this journey. Some of them, like Ajoy, Revathi, Somen, Arun, they are more or less about 35 years part of this journey, you know? And so they have been associated with many brands, many businesses. Some of us who are slightly younger from that point of view, but you know, like Ginny who kind of set the whole international ambition formally. We had two times before this when we went international, we ventured international, and I would say they were very important from many aspects, but financially they were not successful. And at least this time Ginny helped shape that. Anantha was part of the Tanishq journey at a very, very important time, and now he's helping us shape the mass and helping the mass to reclaim its rightful place for the Arab diaspora. And Raghavan, you know, Raghavan who is the newest, he said the newest baby on the block, is trying to kind of sharpen our consumer proposition in eye care.
Many more are there in this room, you know, my colleagues, my friends, and many more beyond this room. Roughly, I'm told now we are about 75,000 plus people, 13,000 who directly work with us, and another 60-70,000 who work with our partners. So these are the reasons this journey became worthwhile. And I at least now want you to give them a round of applause to all those 75,000 people. One thing should be clear to us, looking at this chart, that we are a bunch of restless people. And you can expect, when we see this chart 5 years hence, 4 years hence, there will be some new things. I can guarantee. And if you ask me, 'Are you looking at something?' Answer is no. I'm not looking very actively on any M&A at this point of time, but I can guarantee you 5 years hence, when we meet, I may not be there, but whoever is there, you will have maybe one or two new brands, one or two new companies, and that is what would happen. So that restlessness is, I think, a very, very important aspect which makes every day worthwhile for us to come back.
While this journey had its excitement, while it may look smooth from very modest start to 75,000 plus crore, every period had its challenges, its excitement, its opportunities. But what I want to talk today to you, particularly the last 3-4 years, what's happening, and we all know much more than me about this, that we are in a world where orders are shifting. We are navigating a very difficult world where geopolitics is a surprise every day. One day we think things are getting better, and another morning we think we are getting deep into the problem. And what it has led to, if you see that in the last 3-4 years, particularly June '22 onwards, in 4 years, roughly, gold price have gone up by three times. So all this geopolitics started with Ukraine and Gaza and US tariff and now the latest one which we are looking at very carefully, but it all had some kind of business implication for us. And are we able to navigate it successfully? So when the Russia war started, the whole diamond supply chain got disrupted, and I think Titan was agile enough to secure its supplies much before when things became very tough. And you may remember that we had some inventory gain because of that because after that diamond prices shot up due to scarcity. That was a one-time gain, which we had called out in FY23. Similarly, further events have happened – the gold rally started, and the latest is US tariff where the supply chain for US got disrupted. While it might be only 2-3% of our revenue at that point, very easily and swiftly we were able to readjust our supply chain. Business was not at all impacted, but fortunately now that issue seems to be behind us. The latest is the current crisis unfolding, and it has implications. We will discuss a little bit more about that because you would have been hearing about regulatory changes which have been brought in India, and I will cover that. What are those exactly, and do they affect or impact Titan or not? So the whole thing I wanted to tell you is that the last 3-4 years are now not unusual. They would remain in a way business as usual. As the world order is shifting, we may expect many more such things to keep coming. And the whole thing is that how as a business you are agile in your response, you are able to anticipate, and kind of navigate and adjust yourself to still continue to do what you want to do.
Now I'm coming to some of the numbers we have done, putting this context. While the last 3 years have not been the easiest environment from the macro point of view, still I think we were able to deliver good performance. You see FY23 as a base because all of you would remember that COVID and post-COVID two years, FY22 and 23, saw a surge in buying. About 30% plus growth, resurgent buying, revenge buying. So it was a really good base because in those two years we had doubled from 20,000 to almost 40,000 crore. So 39,000 crore is a good base from where to see where we went in this challenging environment. So this is roughly double in the last 3 years. You can also see that jewelry business overall has become more heavier in our portfolio from 87% to 89%. But the point is that we still see, and I wanted to talk about what has changed. Our businesses that were at a low scale pre-COVID have now scaled up and are growing very fast. International business excluding the mass grew 63% last year, and 82% over 3 years. CaratLane numbers are there. Titan people talked about the remarkable story unfolding in engineering space. We are very proud of the performance in Titan. Arun made such a beautiful presentation on TMJ and brand story. All of us are emotional people. I know you guys are good at controlling your emotions, but some of us become very emotional when we see those movies and how we engage with customers. But keep doing good job. I'm sure you connect with those emotions these brands stand for. On the watch business, analog watches have been doing extremely well in the last 3 years at 18% CAGR, but if you include smart, the number drops slightly. Eye care story you heard, emerging businesses are doing well. The whole point is that while they have done well, we still have huge market share opportunity. Except for analog watch business with dominant market share, every other place we are in low or high single digit market share. So opportunities are many. The other important growth factor for us is our retail network. Not only new additions, but new geographical additions and renovations. These two dimensions are very key. In FY23 we had 404 town presence (consolidated, including international), 2,700 stores and 3.5 million square feet. Outside India only UAE at that time, one store in US. In FY26, we now have 440 towns, 3,600 stores, and 5.2 million square feet. With Damas becoming our partner, GCC is fully covered. US has 10 stores, Singapore has come up. We keep saying North America, hopefully in FY27 we will cover North America including Canada. Now I want to come back to jewelry. Arun presented very well the Tanishq story. These numbers are for Tanishq, Mia, Zoya together. Last 3 years we have grown 23%, almost doubling from 31-32,000 to close to 60,000 crore. I wanted to show you core jewelry (plain and diamond, excluding coins) because in the current environment of rising gold prices, coins are growing disproportionately. Core jewelry also grew by 21% in the last 3 years. Plain jewelry 1.9x, studded 1.7x. Coin has grown at 58% CAGR, double that rate. I don't expect it's a permanent shift, but it may stay for a couple more years where investment-led demand will keep people buying coins, putting pressure on mix.
Yeah, so this is what I wanted to come to. We saw that jewelry business is doing extremely well with CaratLane, Damas, and international jewelry business. So there is a business side of it which is increasing its contribution. The second part we discussed about how in the whole jewelry portfolio coins are also becoming a bit sizable because of the growth rate and demand at this point of time where gold is the flavor of assets, and people buy physical gold. And all these things have led to from FY23 to FY26 gross margin coming down by 3.4%. This margin pressure is not from input side that we cannot pass on. It is mix-led because gold as a category is influenced by many considerations. So whatever the teams have done, this is the kind of margin pressure. We tried to manage our costs well while investing what the business needed in this environment of rising competitive intensity. Scale and cost management gave us leverage of 2.1%, but that was not sufficient to fully offset the gross margin pressure. Eventually operating profit margin came down from 11.9% to 10.6%, 130 bps. But the story is very bright in other parts of the portfolio. CaratLane improved from 5.8% to 9.9% in the same period. Not huge further opportunity, but as they scale up, low double digits (10-11%) should be doable. Titan (engineering) is a shining story, but their 19.1% is not sustainable; I think 12-14% is more sustainable as they need investment. Domestic watches have optimized margin, little headroom left. International business turned positive for the first time in FY26. So the portfolio is becoming stronger and giving us ammunition to invest.
In the last 3 years, our own cash generation and gold metal loan leverage allowed us to invest in organic growth. Internal generation was sufficient. Gold prices caused inventory value to go up, and a large part of cash profit and gold loan went into working capital (18,000 crore). We made about 6,000 crore of strategic investment (CaratLane 100% and mass investment). CAPEX of 2,000 crore went into retail expansion and manufacturing. So we can generate cash to support organic growth. For large inorganic, we need to borrow.
Return on equity has improved. Assets slightly down with higher inventory from 1.6 to 1.5. Through prudent leverage, we still deliver high ROE. Summarizing FY24-26: Revenue CAGR 25%, EBIT lower than revenue growth, EBIT margin down 1.3%, cash generation supporting organic growth, ROE improved.
Now coming to looking ahead. Dinny and Arun spoke about opportunities, so I won't repeat. Gold prices have become volatile, affecting customer decision. I want to spend time on regulatory environment. Three things happened in last couple of weeks. First, custom duty on gold increased from 6% to 15%. History: before 2012 it was specific rate, then 2% in 2012, then 10% after 2013 crisis, then 12.5%, then 15%, then down to 6% briefly, now back to 15%. India has seen high duties before; it's not new. It has implications for gray market, but we understand. Second announcement: duty-free import for export jewelry was unlimited, but now capped at 100 kg. You submit 50% export to get another 100 kg. This creates more paperwork but no adverse impact for us. Third, silver import restricted, doesn't impact Titan. What we have done: the gold procurement program (GP) has increased significantly. On procurement side, about 40% of our sourcing is through this program. Gold monetization scheme we tap. Cash for gold is an experiment. We have secured supplies for many months, so even if further restrictions come, we are good. These are short-term measures; we have long-term strategy.
I will close with summarizing the EBIT ambition. Left side FY26 numbers, right side FY30 ambition. Jewelry business likely to deliver higher revenue growth but lower operating profit percentage (1.8x profit growth vs 2x revenue). CaratLane can improve EBIT margin. Watches have some room. Eye care can deliver 2.5x operating leverage with 25% growth. Emerging businesses will become profitable. International business small profit now, will grow 5.5x, Damas should double with high single digit profitability. Titan (engineering) will grow 3x but margin comes down to ~13% due to investments. Overall, at consolidated group level, we expect to not only double our revenues but also double our profit. So I leave you with that, and then we will get into Q&A. The floor will be open for you.
