Welcome back and thanks for being with us. You're watching First Trades here on ET Now. I'm joined by Ashok Sonthalia, the Chief Financial Officer at Titan, joining us this morning. Ashok, great having you. Let me first start off, Ashok, by trying to contextualize the numbers because the margin number was well ahead of what estimates were penciling in, but there was a one-off as well, right? 400 odd crore. Just give us a sense as to — and not just one, there were a couple of one-offs. Just if you can decode that for our viewers just to start off.
Okay. Yeah, hi. Good morning and thank you very much for having me here. Quarter one, you know, in the May month, customs duty had gone up from 6% to 15% on gold imports. And what does that mean? That the existing inventory which has already been paid for custom duty, part of that inventory experiences again because of the increase in — and that was about 400 crore between Titan and CaratLane. Of course, Titan has majority share of 386 crores. When the sudden custom duty increase happened, there was differences of prices between international and domestic market, and we have been buying gold at that point of time which led to some accounting MTM gain, and that's what we called out — about 75-80 basis point of that one-time impact. While custom duty gains are realized gains, so they are not going to go away, but this MTM gain over next two-three quarters will kind of reverse.
Right. Ashok, I wish I could ask you where gold prices are headed directionally. Want to stick your neck out and tell us?
You see, you know, Titan primarily is a fully hedged company on gold, and we believe we do best converting gold into jewelry for our consumers. We don't take a call or generally develop a view on where the gold prices would be. We always like a gradual appreciation in gold prices, not a volatile environment which we see these days, which is not great. But yeah, we still try to do our best.
Understood. But tell me, plain and studded jewelry both grew in mid-30s for you, which is particularly encouraging given the stable gold price environment at least for the last quarter. Are you seeing a broad-based improvement in consumer demand, or are exchange schemes still playing a major role?
Exchange has been playing a good role, I would say, from the quarter three last year. While we have been doing exchange throughout, you know, our existence, but quarter three we started promoting it in a big way, and that has improved the, you know, what the sales have attachment of gold exchange, and that has been inching up gradually. In the May month also, when the prices and there was some of the regulatory issues and Prime Minister request point of time, we saw exchange going up, but again it has come back to the normal level, but it is still at the elevated level. I think we are finding consumer demand — you know, Akshaya Tritiya was a great time when people came in big way. In the month of June again we saw customers coming back in a big way. The May month was the only a bit slow month which was Adhik Maas and some of those regulatory changes.
And you expect that demand to kind of sustain, Ashok? If you can give us a sense of that, because if April and May was softer and June has come back strongly, are you seeing that momentum sustaining in Q2?
So April was strong — just, May month in between for a couple few weeks was slow. July has been strong. We know, you know, in quarter two we have Festival of Diamond every year which we promote, and that always — we have many offerings, we have many campaigns, we have of course our exchange program supporting some of these things. So quarter two always is a slightly stronger quarter as far as diamond jewelries are concerned. And we are seeing that while gold prices, because they were stable, they have again gone up slightly, people we find a little bit being hesitant at this point of time and trying to perhaps time and get the better sense which way gold will go. But diamond jewelry is doing pretty well.
Right. And what exactly is now the outlook on Tanishq, Mia, and Zoya together, which have grown about 38%, while CaratLane growth has been about 40%. And how are you thinking about the positioning of these brands going forward? Where is it that you see the biggest legroom in terms of growth?
So you see, now we have I think six brands — Tanishq, Mia, Zoya, Beyond, CaratLane, and Damas for the Arab segment, which is non-Indian diaspora. So with six brands, they all have their own positioning, target group, segment. Some overlaps are always good so that, you know, there is no cracks in between — you are missing out to any segment. So all the price points, all the design — I think widest choices between these six brands we cover.
As far as future growth, you talked about, we must remember that quarter three, quarter four of last year was very, very strong growth quarter, a very high base. So I would expect that while quarter two can still be very good, quarter three, quarter four, we should not extrapolate the same growth rate. The other point which is happening — that in quarter one is still YOY basis gold prices were 59% on an average higher than quarter one of last year. That gap is narrowing and significantly will come down. That's expected as we move forward in FY27. But our long-term, Aisha, to your point, we have talked about FY30 doubling the revenue from FY26. I think we are on track for that.
