CK Venkataraman, managing director of Titan Company, sheds light on the company’s Q2 profit drop, the impact of lab-grown diamonds, and shifting consumer trends in the jewelry industry.
Profits Take a Hit
Titan reported a 15% decline in quarterly profits, largely due to a significant drop in customs duties on gold imports in July 2024. The company’s inability to hedge the customs duty component of gold leased for jewelry manufacturing resulted in an approximate ₹600 crore loss, as highlighted during Titan’s August investor call.
“The customs duty cut was the single biggest reason for the ₹290 crore hit in Q2 profits,” Venkataraman said. Despite the dip, he noted that sales growth in jewelry, watches, and wearables was “very satisfying.”
Lab-Grown Diamonds: Threat or Opportunity?
While the global rise of lab-grown diamonds (LGDs) is reshaping consumer preferences, Venkataraman downplayed their impact on Titan’s diamond jewelry business. He attributed the slowdown in natural diamond sales to consumer perceptions about high prices and gaps in Titan’s product strategy.
“Lab-grown diamonds are an important strategic consideration, but we haven’t yet seen them act as a serious substitute for natural diamonds in India,” he explained. Titan is addressing these challenges by refining its product offerings across various price points.
Looking Ahead
Despite current hurdles, Titan remains optimistic about its growth trajectory, focusing on meeting evolving consumer expectations and leveraging new market opportunities.