High Gold Prices Mute Titan Growth

RAPAPORT... Indian jewelry retailer Titan Company cautioned that sales were lower than expected in its first fiscal quarter as high gold prices weighed on consumer spending. Sales from the jewelry division, which includes the Tanishq brand, grew 13% year on year for the three months ending June 30, the company said in an operations update Monday. "The quarter witnessed a tough macroeconomic environment with consumption being hit. Very high gold prices, particularly in June, also impacted growth in the jewelry industry," the group explained."Growth, particularly in the jewelry segment, was lower than planned even though the gains in market share were sustained," it added. Gold ended the quarter at $1,409 per ounce, an increase of 9% from three months earlier, and set a record level in rupee terms of INR 99,666 an ounce in late June. The government announcement to raise the import duty on gold from 10% to 12.5% will further "stymie" the jewelry sector, according to the Gem & Jewellery Export Promotion Council (GJEPC), an industry body. Titan noted areas of strength in the segment, with "decent growth" in wedding jewelry and studded pieces. Meanwhile, the company saw a 19% rise in its watch sales, partly driven by a large institutional order from Tata Consultancy Services. Revenue from its eye division grew 13%. Image: A Tanishq showroom at Balmatta Road in Mangalore. (Aviator423)