Thread by @MlnDollarMinds

#TITAN at a webinar organised by Kotak Securities

Time for thread 👇🏻👇🏻👇🏻

@dmuthuk

(1/n)

Smaller players facing credit challenges. A few of the smaller jewelry players are seeing some stress in terms of bank limits, which has not increased for them commensurate to the gold price increase. Nevertheless, several players have done well in 3QFY21.

(2/n)

Recent demand trends. Geographically, South saw the strongest growth, led by the state of Tamil Nadu. The West market (mainly Mumbai and Pune) was impacted the most. Delhi too was impacted but has largely bounced back.

(3/n)

Working capital improvement. TTAN significantly improved cash generation in FY2021. The management indicated that the increase in share of gold exchange program led to an increase in working capital.

(4/n)

The sale of plain gold (bullions) during Covid eased working capital. The company would continue to sell off plain gold (procured through the gold exchange program) every quarter for efficient working capital management.

(5/n)

Growth in wedding jewelry augurs well for TTAN. Over the past few years, TTAN has shifted its focus to the increasing share of wedding jewelry over studded jewelry. Wedding jewelry demand tends to be more inelastic to the gold price movement.

6/n)

Margins in the wedding jewelry are better than plain gold jewelry. The company now caters to 20+ communities. It is trying to gain market share in the segment.

(7/n)

Store expansion plans. In jewelry business, TTAN plans to add about 35 stores to its footprint in FY22E. The company will also expand strongly in eyewear category. TTAN will not be expanding its footprint for Taneria for now. It will monitor how profitability shapes up.

(8/n)

Perspective on what TTAN does differently. TTAN believes that the professional management approach followed by the company differentiates it from other jewelers and this is the key reason for success.

(9/n)

Eyewear business. The eyewear segment has become profitable for TTAN on the back of several initiatives. The company has done a lot of work on the product-side (including patented offerings) along with sustainable cost optimization measures.

(10/n)

Gold exchange program. Over the past 3-4 years, the gold exchange program has become a large part of the customer acquisition strategy for TTAN; its share had increased to 45% last year from 20% five years ago. TTAN would continue to push the gold exchange program.

(11/n)

Margin improvement levers. TTAN enjoys multiple margin improvement levers including (1) topline growth providing operating leverage benefit, (2) change in product mix, including higher sale of wedding jewelry and studded jewelry.

(12/n)

Other key points. (1) TTAN typically has 40-50% of new customers in a normal year. (2) The average ticket size has increased to above Rs100,000 from Rs65,000 a few years ago. This metric can come off slightly if people buy more daily-wear jewelry.

(13/13)