Now we discuss Titan's numbers. In the second quarter, the company's profit and revenue came in better than estimates. However, there is some pressure on margins. Revenue grew 25% and profit increased by about 43%. Meanwhile, margin growth was slightly below estimates. With us is Titan's CFO Ashok Sonthalia. Good morning, Ashok ji. Ashok ji, I want to understand one thing. This big jump in revenue – how much of it is purely because gold prices have increased? And what I want to know is, is there any disparity between the overall sales volume and the sales number?
Greetings, Anuj ji. When we talk about volume, we always talk about the number of customers – whether the number of buyers is growing or not. While typically volume can also be in terms of kg and turns. So we have called out volume. There is pressure on buyer growth, and of course the typical kg turn volume is also degrowing. So this is typically ticket-size-led growth, where the average ticket size has gone up, but the number of buyers has not gone up. So to that extent, you can say growth has been good, but we would be happier if more and more customers also come. But if we talk about the festive season after that, we have seen a change – now customers are also coming in. With the new gold prices and a minor correction after Diwali, we are now seeing growth in customer volume as well.
Okay. Good, Ashok ji, one more thing I want to ask: after gold prices have risen so much, is there a behavior shift? There was talk that now most people are bringing their old jewelry, melting it, and getting new jewelry made, instead of directly going for new jewelry. Are you seeing any such change in the mix?
So Titan and Tanishq have always run an exchange program, which is the industry gold standard in terms of transparency and customer experience. We have definitely started an offer and campaign from the end of September, which has been quite successful. So the percentage of sourcing through the gold exchange program has increased significantly. And I think when gold prices are high and the wedding season is coming, customers favor the exchange program – they bring their gold and some cash, and accordingly they can buy more.
Hello Ashok sir, this is Veerendra speaking. I have a question that I asked you about two quarters ago, sir. At that time gold was 80-85, sir. I asked you whether you are moving into lower carats. Looking at the current trend, what do you think? Is buying in lower carats good? Is buying in studded jewelry good? Is the client shifting towards diamonds? Is the consumer shifting? Could you comment on this?
So, we are seeing good acceptability for 18 carat and 14 carat, especially 18 carat. Typically in India, there has always been a higher inclination towards 22 carat. But now many people are paying attention to 18 carat, and even 14 carat which we are introducing. However, it is still not a sizable portion of our inventory because it takes time, but over the last four to six months, a lot of work has been happening on that. So to that extent, it will help customers. Secondly, we have been working on lightweight jewelry for many years. Gold prices have been on a high run-up for the last three to four years in a way. So lightweight and lower carat are both getting accepted by customers. Due to high gold prices, there is an issue with the number of customers growing. Whereas in studded jewelry, we have seen over the last five to six quarters that the number of customer growth is better compared to gold jewelry. The coin side, which is investment-led purchases, has been on very good growth for the last six to eight quarters, and its percentage in our portfolio is also increasing. That is completely investment-led, and consumer growth there is very good.
Sir, I would like to ask a question, I don't know if it's appropriate, but in the silver segment, what was the situation this time? I mean, how did silver contribute for you this time?
8 more exchanges in this transcript
Sign in free to read the rest of this interview. No card required.
