Titan Bullish About Next Two Quarters Of FY25, Says CFO Ashok Sonthalia

I think we were pretty satisfied with the growth number and we all know that Indians' love for gold, but in this quarter it was far more pronounced. After the custom duty cut, we saw a lot of customers and consumers coming back, and the wedding customers, etc. But preference has been more towards gold jewelry and gold coins also have gone up into the mix, while studded has been selling, but if you look like-to-like, the percentage mix has come down by about 3% and that has impacted margin. The gold high reduces diamond jewelry margin to some extent because of the gold content there. All these have led to, and with the high prices of gold, of course every jeweler is trying to make it more attractive through offering exchange programs or some kind of discounts on gold prices, so we also have offered some of those schemes during the quarter. And this trend looks like it is going to be there for some more time. We have seen festive season extremely again well received and gone very well, but the gold continues to dominate the theme, and that is what led us to reduce our guidance for FY25 to 11 to 11.5% for jewelry EBIT margin, which seems to be more realistic for us to strive for and deliver.

This is very difficult to predict, but what I believe more than competition at this point of time was the product mix which was impacting our margin. As I told you in the beginning, people are preferring gold more over, to some extent, diamond jewelry. While diamond jewelry at a particular price point we have talked about buyer growth, etc., has done extremely well, it is the high carat solitaire where we are seeing some pressure. People are still sitting on the fence and waiting for the noise and price equation to settle down – which way the high carat solitaire prices will go. Competition is of course there, it is slightly more at this point of time, and you need to respond to that through some of the time schemes and offers and a little bit more advertising and marketing. But I don't think that's a major reason for our scale to be calling out as a reason for our margin decline.