Jewellery and lifestyle products manufacturer Titan Company has firmed up plans to export its gold jewellery to marquee global retailers, as current gold import regulatory norms in India mandates the Tata Group company to have a sizable export portfolio.
Titan Jewellery, which constitutes 75% to 80% of Titan's $2 billion revenue, will supply its Tanishq brand of gold jewellery to Dubai-based Damas and Singapore's Mustafa. The exports will also include diamond jewellery sales.
Titan had a gold export business until 2007, but closed it because margins were thin. "Also, we have had such a good opportunity in India that exports became insignificant to us," said Bhaskar Bhat, MD, Titan Company.
At present, Titan, which operates close to 200 boutique jewellery stores, has a 4% market share in the country's Rs 2.5 lakh crore gems and jewellery industry.
"We have an import license, but we won't be able to utilize it if we don't have exports," Bhat told TOI. This follows the Reserve Bank of India's 80:20 rule on gold imports aimed to stem the country's ballooning current account deficit.
As per the rule, merchants/retailers have to re-export 20% of each gold import consignment before placing new orders. Due to these restrictions and increase in import duties, the demand for the yellow metal has softened over the last six months. This was reflected in Titan's jewellery business, which reported a 15.4% decline in the December quarter. Given the current market dynamics and the company's exposure to the gold trade, Bhat expects Titan to end the ongoing fiscal with a 10% revenue growth. In the previous fiscal Titan reported a 14% revenue growth. Shares of the company ended Tuesday's trade at Rs 254.80, up 2.35% over the previous day's close.
Source:- timesofindia.indiatimes.com
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