In its latest filing to the exchange, Titan’s management shed some light on what investors can look forward to in terms of the company’s Q2 FY20 performance.

Sales declined sharply in July. This was attributable to the following headwinds: Gold ornaments, constituting close to 50-60 percent of this segment’s top-line, became costlier due to a steady increase in gold prices , Liquidity crunch,The consumption sentiment in most parts of India remains subdued, thus resulting in lower discretionary spends on high-value products, No festive push Nevertheless, some green shoots were visible in August and September.

During these months, retail (secondary) sales grew 15 percent year-on-year (YoY) due to increased impetus towards advertising. On the flip side, this would impact margins. For Q2 FY20 on the whole, retail sales growth was 7 percent YoY. However, from the consolidated financials perspective, jewellery revenue was down due to the adverse impact of hedges maturing during the quarter.

This happens to be among the weakest growth figures in Q2 in recent fiscals, as seen below. Besides adding 21 new Tanishq outlets (with a retail space addition of 67,000 square feet), product launches were undertaken in Q2. Network augmentation is slated to accelerate further in Q3 and Q4 to maximise market share gains during the wedding season.

Titan increased its shareholding in Caratlane (its subsidiary) from 69.5 percent to 72.3 percent during the quarter. Despite softness in the market, Caratlane sales grew by 75 percent YoY and the store count was 70.