(Reuters) -India’s Titan Company reported an 18% rise in domestic sales in the second quarter on Tuesday, slower than the 25% it registered during the same period last year, as soaring gold prices stunted demand for higher carat jewellery.
The jewellery business, which contributes close to 90% of overall revenue, grew 19% year-on-year, the Bengaluru-based company said in its business update for the quarter ended September 30.
Spot gold prices rose 16.4% in the quarter as investors fled to the safe-haven commodity amid global economic volatility.
Higher gold prices have led to a “marginal year-on-year decline” in buyer count, the company said, even as ticket prices rose as fewer customers bought more expensive items.
Studded jewellery in Titan’s Tanishq, Mia and Zoya portfolio collectively grew in the mid-teens, outpacing growth in plain gold jewellery, the company said.
Investment-grade gold coins continued their strong run for the quarter, the company said, as Indians chose to invest in the bullion as a store of value. However, since coins yield lower profit margins than jewellery, the shift has constrained overall margin growth in recent quarters.
The company’s watches business, second-largest by revenue, clocked sales growth of 12%. The analog segment grew by 17%.
The international business grew 86% year-on-year, led by Tanishq more than doubling its business in the United States, the company added.
(Reporting by Ananta Agarwal and Urvi Dugar in Bengaluru; Editing by Harikrishnan Nair)
