Titan Industries Limited

Delivering value by creating Brands

June 2012

Disclaimer
Certain statements are included in this release which contain words or phrases such as
will, aim, will likely result, believe, expect, will continue, anticipate, estimate,
intend, plan, contemplate, seek to, future, objective, goal, project, should,
will pursue and similar expressions or variations of these expressions that are forwardlooking statements. Actual results may differ materially from those suggested by the
forward-looking statements due to certain risks or uncertainties associated with our
expectations with respect to, but not limited to, our ability to implement our strategy
successfully, the market acceptance of and demand for our products, our growth and
expansion, the adequacy of our allowance for credit to franchisees, dealers and
distributors, technological changes, volatility in income, cash flow projections and our
exposure to market and operational risks. By their nature, certain of the market risk
disclosures are only estimates and could be materially different from what may actually
occur in the future. As a result, actual future gains, losses or impact on net income could
materially differ from those that have been estimated.
In addition, other factors that could cause actual results to differ materially from those
estimated by the forward-looking statements contained in this document include, but are
not limited to: general economic and political conditions in India and the other countries
which have an impact on our business activities; inflation, unanticipated turbulence in
interest rates, foreign exchange rates, the prices of raw material including gold and
diamonds, or other rates or prices; changes in Indian and foreign laws and regulations,
including tax and accounting regulations; and changes in competition and the pricing
environment in India. The Company may, from time to time make additional written and
oral forward-looking statements, including statements contained in the Companys filings
with SEBI and the Stock Exchanges and our reports to shareholders. The Company does not
undertake to update any forward-looking statements that may be made from time to time
by or on behalf of the Company, to reflect events or circumstances after the date thereof.
2

Indian Economy: Some Facts

FY09

FY10

FY11

FY12E

FY13E

Nominal GDP
(US$ bn)

1,224

1,362

1,684

1,853

1,907

Per Capita GDP

(US$)

1,061

1,163

1,416

1,535

1,692

Real GDP growth

6.7%

8.4%

8.4%

6.5%

7.0%

Pvt Consumption
growth

7.1%

7.0%

8.1%

6.5%

6.5%

Inflation - WPI
(Avg)

8.0%

3.6%

8.6%

8.8%

7.4%

Rs/US$ - Average

46.0

47.4

45.6

48.1

53.5

Source: CSO, RBI, Ministry of Finance and CIRA estimates

Despite the slowdown, relatively high growth economy

4th largest economy in terms of purchasing power parity (expected to be 3rd largest by 2020)
Premium segment 14 million (expected to grow five-folds in the next decade)
Middle class - 200 m (expected to double in the next decade)
3

Titan Industries

Our Brands
Luxury
Premium

Mid Market

Mass
Market

Indias largest specialty retailer

Luxury

25

Premium
332

Mid Market

205
129

Service Centres

728

102

Mass Market
32

827 exclusive stores

157 Towns

Over a million sft of retail space

6

International presence

Kuwait - 45
Iran- 41
Nepal - 30

Pakistan- 62

Qatar - 52

Brunei- 10

Bahrain - 57

Bangladesh - 70

Saudi Arabia - 642

Ghana - 5

Thailand- 21

Vietnam- 95
Nigeria- 10

Sri Lanka- 67

Ethiopia 11
Uganda - 15

Djibouti - 1

Malaysia- 92
Singapore - 44

UAE- 120

Oman - 97
Kenya - 23

Mauritius- 17

South Africa

Fiji- 4

Maldives - 15
Yemen - 15

1,700 Outlets

Silver Jubilee: The Journey

2011: Mia
2009: Helios
2007: Eyewear
2006: GoldPlus

2003: Fastrack

2008: Zoya

2010: Fastrack
Accessories

2005: Precision
Engineering (PED)

1998: Sonata Launch

1996: Tanishq
1994: Timex JV
1993: Europe Foray
1987: Launch of Titan watches
1984: Conceived

Where we stand today

Worlds 5th largest Watch Manufacturer

65% market share in organized watch market
Sonata: Indias largest selling watch brand
Tanishq: Indias leading Jewellery Player and a game changer
Titan Eye+: Indias largest retail chain in eyewear
Strength in Retail: Over 800 stores with over 1 million sft
Distribution: More than 11,000 Multi-brand outlets
First acquisition completed Favre Leuba brand acquired for
Euro 1.5 million

Watches Division

1
0

Indian Watch Market

Total estimated market
Volume: 53 million
Value: close to US$ 1 billion
Organized market ~ 23 million

Only 27% of Indians own a watch

Market size expected to double in next 5 years
Competitor brands : 65
Titans market share of organized market: 65%

1
1

Titan Watches Division

Four major brands

Sold through

Exclusive World of Titan outlets

Fastrack outlets

Multi-brand outlets Helios

Multi-brand dealers and stores

Large-format stores like Shoppers Stop,

Lifestyle, etc.

Large network of exclusive service

centers

Sophisticated Design & Development

Center

Core strength in Industrial, Retail and

Graphic design

Numerous international award-winning

designs to its credit

Roorkee

Pantnagar
Dehradun

Manufacturing &
Assembly
facilities

Goa
Hosur

1
2

Watches Distribution
Retail All India

11,000 dealers
2,500 towns

World of Titan

332 showrooms (21 added in 2011-12)

132 towns 339k Sft

Fastrack
Helios
Service Centres
International

102 stores / kiosks (55 added in 2011-12)

49 towns 49k sft

25 stores (19 added in 2011-12)

11 towns 42k sft
728 outlets
270 towns
1,700 outlets
28 countries
13

Jewellery Division

14

Indian Jewellery Market

India has been the largest consumer of gold in the
world, accounting for 25% of world consumption
FY11-12 Demand for gold
Volume: 854 tonnes (Jewellery: 534 tonnes)
Value : US$45 billion (Jewellery: US$28 billion)

Independent Jewellers : 300,000

Organized players (regional) with multiple outlets ~ 15
Titan is one of the few national players in the market
Titans share < 5% of total market
Headroom for growth significant

1
5

Titan Jewellery Division

Largest jewellery retailer in India
Three major brands Tanishq, GoldPlus and Zoya
Sub-brand - Mia, for the working woman
Manufacturing facilities in Hosur and Dehradun
Innovative Services Golden Harvest / Future scheme, gift vouchers,
gold exchange schemes and made to order facility
Loyalty Programmes - Anuttara & Ananta
Customer First and Lean initiatives in manufacturing and retailing

16

Jewellery Distribution
Tanishq

GoldPlus

131 stores including 2 Zoya stores (10

added in 2011-12)
394k sft (102k sft added in 2011-12)
79 towns

32 stores (3 added in 2011-12)

67k sft (16k sft added in 2011-12)
32 towns

17

Eyewear & Precision Engineering

18

Eyewear
Indias largest optical retail chain

205 retail outlets (55 added in 2011-12) across 69 towns

State of the art eye-testing facilities
Lens manufacturing facility
Products include frames, sunglasses, contact lenses, ready
readers, lens cleaning solutions and other accessories
Three in-house brands
Titan, Eye+ and Dash

Several international and luxury brands

Key differentiators Style consultants, Zero-error prescription,
free eye testing, scratch-resistant lenses, lens accuracy certificate
19

Precision Engineering
Leverages engineering capabilities
B2B business balances risk of B2C businesses
The Opportunity
India growing as a manufacturing base for precision products
Cost pressures and offset requirements guarantee a long term
opportunity
High cost of switching for customers
Large & growing market: US$ 32 billion globally

Catering to Industries
Automotive
Electrical and Telecommunication
Aerospace
Oil Exploration & Production
Healthcare
Solar & Other Engineering

Clients include

Eaton, US
Hamilton Sunstrand, US
Microtechnica, Italy
Pratt & Witney, US
Ford, UK
Bosch, India
Timken, India

20

Q4 Performance

21

Q4 - Background
Slowdown in economy continued due to high inflation
coupled with high interest rates
Depreciation of the Indian rupee affected input costs
High gold prices affect gold volumes customers were
paying more but buying less quantity
Company focus on retail network expansion continues
47 outlets (33k sft) added in the quarter across divisions
Commenced commercial production in the new Jewellery
Unit in Pantnagar
Launched Sonata Super Fibre watches at Rs 225
Launched Tees collection of watches from Fastrack
Limited launch of fq diamonds for teens
22

Q4 - Retail growth
Sales value
growth

Like to like
growth

World Of Titan

18%

14%

Tanishq

38%

25%

Goldplus

36%

23%

3.9 times

-9%

Fastrack

95%

16%

LFS Watches

34%

19%

Titan Eye+

32%

-1%

Helios

23

Company performance
Q4 Performance
2,500

Rs Crores

2,000

2,327

Revenue growth at 30% despite

slowdown in economy
PBT growth : 73% (31% after
adjusting for non recurring
expenditure last year)

1,792

1,500
1,000
500

207

120
0

Sales

PBT
Q4 FY11-12

Q4 FY10-11

144

84

PAT

Annual Performance
10,000
8,971

9,000

Revenue growth : 37%

PBT growth : 40% (32% after
adjusting for non recurring
expenditure last year)

Rs Crores

8,000
7,000

6,571

6,000
5,000
4,000
3,000
2,000
599

1,000
0
Sales

838

PBT
FY10-11

FY11-12

430

600

PAT

24

Capital Employed
1,600
1,457
1,400

Rs Crores

1,200

1,095

1,000
800

639
600
400

504

505

378

200

114

171

98

144

0
Watches

Jewellery
Mar-11

Others

Corporate

Company

Mar-12

Higher inventory levels and investments in fixed assets contributed to

increase in capital employed
25

Watches
Q4 Performance
500
430

450
400
Rs Crores

350

339

Volume growth : 14%

Revenue growth : 27%

300
250
200
150
100

53

50
0

12
Sales

PBIT

Q4 FY10-11

Q4 FY11-12

Annual Performance
1,800
1,592

1,600

Rs Crores

1,400

Volume growth : 15%

Revenue growth : 22%
Margins under pressure due to
input cost rise as rupee weakens
against other currencies

1,309

1,200
1,000
800
600
400

217

192

200
Sales
FY10-11

PBIT
FY11-12

26

Jewellery
Q4 Performance
2,000

1,803

1,800

Rs Crores

1,600

Customer growth : 4%
Jewellery volume declines by 7%
Studded share : 32%
Revenue growth : 31%
PBIT growth : 28%

1,372

1,400
1,200
1,000
800
600
400

182

142

200
0

Sales

PBIT

Q4 FY10-11

Q4 FY11-12

Annual Performance
8,000

7,045
7,000

Customer growth : 14%

Jewellery volume growth : 5%
Studded share : 26%
Revenue growth : 41%
PBIT growth : 45%

6,000

Rs Crores

5,014
5,000
4,000
3,000
2,000
1,000
0

698

483
Sales

FY10-11

PBIT

FY11-12

27

Others Segment

Q4 Performance
100

Rs Crores

80

94
81

Revenue growth : 17%

PED growing profitably

60
40
20
0

Sales

-20

PBIT

Q4 FY10-11

-10
Q4 FY11-12

-5

Annual Performance
380
334
330

Rs Crores

280

Revenue growth : 35%

Eyewear revenue growth : 26%
PED turned profitable

248

230
180
130
80
30
-20

Sales
FY10-11

FY11-12 -18

PBIT -4

28

Performance Trends
(Rs Crores)

Total Sales
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

4,703
3,848
3,041

Watches: Sales
1,800

2008-09

2009-10

2010-11

2011-12

Jewellery: Sales
15%

8,000

1,592

1,600

36%

7,000
1,309

1,400
1,200
918

946

6,000

1,052

(Rs Crores)

(Rs Crores)

8,971

6,571

2007-08

1,000

31%

800
600

5,014

5,000
3,497

4,000
3,000

400

2,000

200

1,000

7,045

2,761
2,027

0
2007-08

2008-09

2009-10

2010-11

2011-12

2007-08

2008-09

2009-10

2010-11

2011-12

29

Performance Trends (contd.)

PBT
900

43%

800

(Rs Crores)

700

838

599

600
500
400
300

321
202

231

2007-08

2008-09

200
100
0
2009-10

2010-11

2011-12

PAT
700

41%

600

600

(Rs Crores)

500

430

400
300
200

250
150

159

2007-08

2008-09

100
0
2009-10

2010-11

2011-12

30

Performance Trends (contd.)

Capital Employed
1,600

1,457

1,400

(Rs Crores)

1,200
1,000
800

Cash balance up by Rs.

908 crores over the
period

1,095

718

745

2007-08

2008-09

802

600
400
200
0
2009-10

2010-11

2011-12

ROCE

70%

RONW
58.5%

60%

62.0%

60%
50%

50%

45.4%
40%

40%

34.8%

39.4%

49.2%

48.5%

2010-11

2011-12

39.2%
32.2%

34.2%
30%

30%

20%

20%
10%

10%

0%

0%
2007-08

2008-09

2009-10

2010-11

2011-12

2007-08

2008-09

2009-10

31

Market Capitalisation
25,000

20,290
20,000

(Rs Crores)

16,900
15,000

10,000

8,132

5,000

3,530
500

4,400

5,038

3,462

1,018

0
2003-04 2004-05 2005-05 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
32

Market Capitalisation (US$)

4,500
3,967

4,000

3,789

3,500

(US$ million)

3,000

2,500

2,000

1,810

1,500
1,179
1,000

791

857

2005-06

2006-07

680

500
45

104

2002-03

2003-04

224

0
2004-05

2007-08

2008-09

2009-10

2010-11

2011-12

Note: Market capitalisation is based on BSE closing prices at year end

33

Recent Recognition
Corporate

ET Retail award for Excellence in Employee Practices

IMAGES Fashion Award for Most Admired Fashion Company
of the Year
ET Retail Personality of the Year award for Mr Bhaskar
Bhat

Watches

IAMAI Digital Media Awards: Gold awards for TITAN &

Fastrack
Economic Times: Brand TITAN ranked 73 amongst top 100
brands in India
Brand Trust Report card (2012): TITAN is 12th most trusted
across categories, Fastrack is 59th.
4 awards for TITAN and 1 award for Fastrack at the Creative
ABBY Awards 2012

Jewellery

ET Retail award for Tanishq for Innovative Operating Idea of

the Year
IMAGES Fashion Award for Most Admired Jewellery Brand of
the Year for Tanishq
Award for Tanishq at the Creative ABBY Awards 2012
Special brooches designed by Tanishq worn by the head of
states at the 4th BRICS summit at New Delhi

34

Thank You

35