Titan Company Limited (500114) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to the Titan Company Limited Q3 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Mr. Ajoy Chawla, Manging Director of Titan Company Limited. Thank you, and over to you, Mr. Chawla.

Thank you. Good morning, everyone. Thanks for being on this call so early in the morning. Sorry to put you through this but unavoidable. It's been a great quarter. Certainly a festive quarter on a high base. We are delighted to have seen this kind of uptick in demand. And I must also say it is coming on the back of a lot of volatility, competitive intensity, and I must complement all our teams across all the brands and divisions and subsidiaries, who have risen up to the challenge and delivered a good quality execution to kind of take advantage of this. So it's the team effort that has helped. I now hand over this for a few opening comments to our CFO, Ashok Sonthalia. After which, we'll start the Q&A.

Thanks, Ajoy, and very good morning to all of you. Thank you for joining this call. I just thought this 3, 4 important points related to quarter or going forward. I will just point out so that you may please take note. We are very happy to announce that we completed 67% stake acquisition of Damas. And the accounting of that, you will see from 1st January, consolidation of Damas mass books into Titan consolidation. will start from 1st January. So quarter 4 results, you will have Damas consolidation. With CaratLane international business, which is primarily jewelry business, TEAL and now Damas also the consolidated view of Titan is becoming increasingly important. We have also made sizable investment as well in these businesses. Therefore, I urge you to start looking at consolidated performance as well because that's going to be increasingly important. From the beginning of this financial year, we have started providing business view of domestic and international market performances. We also provide reconciliation between the statutory reporting and the business we're reporting in our IR presentation. I do hope this will help you to get a complete picture of business performances. One more important point which we find sometimes people don't account for, we always disclose amount of bullion and Digi-gold sales through a note in our IR presentation as well as the statutory accounts. And we always exclude them from any performance-related metrics. So as these amounts are sometimes significant, I request you to pay attention to these notes while kind of assessing our performance. The other important development, which all companies have faced in India, that labor code impact has been accounted for in our quarter 3 [indiscernible]. The impact on a consolidated level is INR 152 crores, which has been shown an exceptional item in the consolidated as well as INR 138 crores in stand-alone financials. So these were some of the important points which I thought I'll point out today. Now we can open the floor for question and answers. Thank you.

[Operator Instructions] We take the first question from the line of Videesha Sheth from AMBIT Capital.

So my first question is if you could briefly touch upon the growth trends that you've seen in fourth quarter till date, especially in the context of further sequential growth presentation.

This is addressed to any particular division or overall?

I'm sorry. I meant from a from the [indiscernible] perspective.

Arun will answer. Okay.

Okay. on. This is Arun Narayan, CEO of jewelry. Thank you for your question. For the fourth quarter, we've just seen a month gone by and I'd like to leave it by saying it's been a good month. The real difference what we have seen in January versus the month leading up is that the gold rate has been volatile. Right through this year, we have seen a secular rise in gold rate, and that leads to a certain behavior. When gold rate is volatile, it's difficult to call. So I wouldn't want to leave you with anything that is indicative of how it may play out in the rest of the quarter, but only to say that the month of January has been good. But now we are seeing a bidirectional movement of gold rate. So it's too early to call out or give you a guidance or say anything that could guide you on where the rest of the quarter could kind of move.

Okay. Just a follow-up on this, Arun. So the gold-gold exchange campaign intensity has sustained. I mean the old gold mix has sustained at higher levels, which you would have probably seen in the third quarter? Or would that have come off?

Yes. It's sustained and our own investment and efforts behind that call-out also sustains.

Got it. My second question was more from an industry perspective for jewelry. Is there any indication of consolidation happening either on the retail side or supply chain side due to higher gold prices I mean, are you -- I mean is there any indication of riding up of operations of small contract manufacturers or even mom-and-pop retailers, which could idly benefit the overall organized industry?

Nothing. Nothing to really call out as something new which we are seeing. And of course, formalization continues. But beyond that, nothing to call out or report.

We take the next question from the line of Manoj Menon from ICICI Securities.

Great performance. My questions are absolutely slightly beyond the quarter on the short term. Look, I think the sort of unprecedented gold move, which we have seen the previous participants spoke about possibly [indiscernible]. But my question is inward looking, when these sort of, let's say, material, let's say, beyond the demand planning changes, which actually happened, what it to the supplier, gold price, et cetera, if you could talk about, let's say, any behavior in consumers? For example, we would have discussed the digital character repeal and possibly even earlier, but there are practical challenges for consumers to buy anything beyond [ '18 ] on the lower side because as I understand it, [indiscernible] from a supply chain point of view, let's say you manufacture a 10-gram chain, which had a certain lead time under certain, let's say, time for in the stores, et cetera, and suddenly, the price may higher. Sir, could you talk a little bit about how nimble you actually handle these in the last 6 months, let's say, and which is a competitive advantage?

Okay. Thanks, Manoj, for that question. I think the agility perhaps is only on responding to the need to be accessible in jewelry and the need to keep price points clearly in mind so that we offer choice as close to what we offered in the past at certain price points. And therefore, the pivot to lightweight jewelry across the board. introducing 18-carat traditional gold jewelry also in certain parts of the country where we have seen a greater openness to it. We are seeing parts of North and East being more open. But in West and South, we are feeding the thought. And similarly, with stated jewelry at lower carats, we always had 14-carat jewelry in both CaratLane and Mia, but now we've also introduced that in Tanishq and also up to 9-carat in CaratLane and Mia. So these are the ways in which we are responding to keep jewelry accessible. That being said, of course, when there is a changeover or when you have to give sufficient choice across multiple caratage, there is a bit of complexity and there is a bit of transition that the system undergoes which is where what we've been through last couple of months, but we think we'll be able to tide over that. And early signs also are quite positive for these changes that we are sharing in.

Manoj, I'll comment on your supply chain fee. It is not that lead times dramatically change or complicate life, it is simply the changeover and ensuring that you're able to have segregated lines internally that matters. And as far as we are concerned, even when we work with our vendor partner ecosystem, we supply the gold, et cetera, to a large extent. So that doesn't really impact us. That is the concern you might have had in terms of either lead time or volatility in price, et cetera, because it's mostly our [indiscernible].

Okay. Understood. Just one quick follow-up on the first one. Is that the making charges in India is a percentage of the gold price. Now what I'd broadly observed from most of the branded players who advertise lifted unlisted put together, it's an x percentage discount on the maintenance plan. Is that now through the year sort of phenomenon given that the gold prices are higher? Because from a Tanishq point of view case, I observed that you had pockets or systems or windows in which you used to have it. Would that be necessary now to have this through the year?

What would we need to have...

No, no. The discount on making charges given that the stage and as would have down 38% in blended gold inflation. Historically, provisions that Panacea had both discount windows, but given the gold prices were at lease, would you either have to relook at the percentage basis cartages or have an all-year product discount or maybe you're able to manage it better as well.

I think we've been able to manage it across both the gold as well as the stranded portfolio. And we have windows [indiscernible], where it's across the board. And rest of the year, it's uncertain grammage price bands largely catering to the wedding customer. So there is a playbook that we have, which is continuing. We have not seen the need to kind of alter or change that despite the conditions that you are alluding to.

Just a second, if I make one comment. beyond the 1 and 2 and 3 [indiscernible] model, which Tanishq over a long period of time, are you looking at any other franchising models at this point is already there in the market.

Where we keep exploring various models, but nothing really to significantly alter the franchising model that we currently have.

Okay. 4 models for now actually.

Not really.

We take the next question from the line of Arnab Mitra from Goldman Sachs.

Congratulations for a great quarter. My first question was on buyer growth, where you mentioned by growth is flattish this quarter, but there's also a mention of 45% new buyer contribution, something that I think was mentioned last couple of quarters. Are you seeing any improvement in that electric? And how does that square of between not having big growth but 45% new buyer contribution, does it mean that your existing a loyalty or members that where the frequency reduction has happened?

Yes. Thanks for that question. The new buyer share is more or less stayed consistent. And I thought maybe it's just more or less in the ballpark, I would say. However, we do have many ways of keeping our existing customers' warm and bringing them back to the store initiative, which happened at the store level as well as CRM centrally as part of our in-circle program and now also with [indiscernible] new. So yes, so it's a lot of existing customers who continue to come back but new pretty much being in the broad ballpark. And I think also perhaps we have less to be in a category where despite such significant increases in raw material costs, we are still able to kind of hold a certain buyers in our hold. So that's really credit to price elasticity and our ability to kind of hold that despite inflation in gold rates.

So I think the -- one second. The specific question you had was has it gone up or down vis-a-vis last quarter, it has improved. Last quarter, new was 42% This quarter is 45%. But vis-a-vis last year, same quarter, which was 48%, it is lower. So it's an improvement sequentially but a small reduction compared to the previous year.

Got it. And one follow-on question on this was, is there any different trend than studied by growth in terms of that trending better than overall buyer growth?

Yes, it is a few percentage points better and has been also the case last many quarters.

Got it. My second question actually was on jewelry margins. So given what's happened with gold and the mix, which is not really control, I mean, if consumers are more going [indiscernible], do you beyond a point, essentially focus internally more on EBIT growth as a jewelry business or do you still hold on try to hold on to those lines on the margin range that you want to hold? Just wanting to understand how you think about it in this very high revenue growth environment. And also if in the specifically for the quarter, if I should good highlight at by any one-offs in terms of inventory hedging gains or losses further.

Thank you. Ashok here. You rightly pointed out with the rising gold price environment, getting a good fix on margin outcome is becoming challenging. And margins remains an outcome. So in the way we keep praising growth customer acquisition, same market share et cetera. At the same time, we have always said that we are very mindful of margin. So you are right, the EBIT profit growth in [indiscernible] is becoming more and more important than profitability margins because profitability margin increasingly is becoming challenging in the rising gold environment. So that's what. What was your second part of the...

Were there any one-offs in terms of hedging gels or losses in the there quarter.

See, there is no one-off last year quarter 3 custom duty gain was there, which you remember is the normalized and 50 basis point drop is there in quarter 3 compared to last quarter. It all ramp up Yes. Okay.

We take the next question from the line of Sheela Rathi from Morgan Stanley.

Again, my question is with respect to the gear. you referred to that buyer growth has been [indiscernible]. And at the same time, when we look at the started growth, it has been lower than the jewelry business growth. How should we think about the transaction value of customers? I mean, logically, if buyer growth is slow, it would mean that -- if buyer growth is slow, we would believe that the transaction values are going up of course, there is a gold price increase also. But it started, it's lower, how is actually the consumer behaving because this was a quarter which was a high wedding calendar quarter also. So are new consumers who are buying for weddings not coming to Tanker or is there some real change in how consumer is behaving?

Okay. I'll just set the record right on this. Our buyer growth on stated has been a few percentage points higher quarter-on-quarter, not only this quarter, but also many quarters leading to Q3. however, the ticket size growth on gold because of the gold content being higher, is much higher in plain gold than it is on studded jewelry because diamond prices aren't going up but gold is going up. So we are seeing ticket size bigger ticket size jump in gold versus diamonds. And that's why the diamond growth translating into revenue is much higher in gold compared to sites jewelry. That being said, it is also true that we are seeing a greater traction at sales price points in gold jewelry and in studded and there is pressure at lower price points on account of inflation and rise in gold rate. Plus, of course, a certain profile of customers seem to be accepting this right [indiscernible] who may be waiting and seeing if gold rates kind of cooled down. In general, waiting buyers are the ones through where it is not discretionary, and they are the ones who therefore, we needed to give a lot of comfort to from an exchange standpoint. And we are seeing wedding buyers stay obviously invested as a consequence.

Okay. Just my second and final question, again linked to the first question, what would be now the average transaction value of a new customer studded jewelry customer and a gold jewelry customer?

So I think the total ticket size is hovering closer to 1.7 lakhs at an overall level. approximately -- 1.9 sorry, for the quarter, 1.9 lakhs. We may not be able to give you this by studded and plain gold. But I think the question you asked, the studded ticket size has also gone up by 15% in the quarter 3, while plain gold ticket price went up by 44% or something like that. So there is a differential in the ticket size growth. In both of them, I've seen ticket size.

So 1.9 lakh and a new customer? What is the [indiscernible]?

I'm sorry, we won't be able to give that level of [indiscernible]

Understood. Understood. And this 1.9 lakh would be the highest we have seen ever?

That's right. Yes. Yes.

We take the next question from the line of Devanshu Bansal from Emkay Global.

Congratulations on a good performance. Sir, first question is on jewelry gross margin, the comparable gross margin so that we report in our stand-alone financials has dipped by about 200 basis points in Q3. While operating leverage and other cost efficiencies has offset 150 basis points of this impact. Why I'm sort of checking on this because we have not seen such timing of gross margin dip in the previous quarters. I wanted to see the nature of these growth investments that we're making in the business. What happens if sort of growth profile of the business takes a dip? Are these sort of investments reversible in nature? Or we may see some margin challenge if gold is insured?

So I guess that you are looking at Titan Company performance slide and alluding from there what has happened to jewelry because you are right, largely Titan Company stand-alone numbers reflect jewelry number, but the drop in DC [indiscernible] in so 1% okay? Okay. So normalized, yes, you are right, 1% drop. And we have been talking about that. In rising gold prices, there are 2, 3 ways margin gets impacted. One is, of course, gold coin values has gone up quite a bit. Studded will be margin because of the gold content goes up in terms of value. The studded volume margin also goes down while gold jewelry remain the way they are. And this put together, I think -- and you also need to check whether you are including bullion in your calculation. So please exclude bullion which has been given...

I've excluded that. So in Q3 last year, there was no bullion reported by you. And this year, it's very small amount.

No, I just wanted to check that you are doing -- you might have done that [indiscernible], but all these things are leading to this kind of thing. And that is what we said if gold prices keep rising like this. Whatever we are doing, 14 carats, 18 carat, 9-carat, lives will be they could eventually catch up when gold prices stabilize. In the continuously rising gold prices, jewelry margins will kind of exhibit this kind of pressure. But absolute because of the growth coming in -- I think absolute EBIT or absolute PBT, whichever level you want to look at, has been growing nicely recently. But yes, not in the same percentage as revenue. And business mix is another. When you look at the company level, ECL level, then the business mix also plays a role. Jewelry is becoming and in quarter 3, particularly, it has become more dominant because of 40% growth while other businesses have grew nicely, but they are 17%, 18%, 14%, 15%. So because of 40% now jewelry, which is a slightly lower-margin business has gone up in the portfolio mix, and that also has suppressed PCL India or TCL consolidated margin.

Okay. Understood. Understood. And sir, we. I also wanted to understand there is a good component of sales coming from gold exchange and some of the installment schemes that we have, which is relatively new to the gold price. So wanted to say what is the mix of these 2 currently for our business and maybe what we are targeting for the upcoming year through [indiscernible] scheme and the installment teams?

Yes. So I'll answer that. The jewelry purchase plan, we started with Golden Harvest many years. Over the last almost 2 years, the program that gained traction is called Golden Advantage, which is a grammage program and very relevant solution for anyone planning to buy jewelry in this inflationary era that we are in. And as you all are aware, anywhere from 20% to 25% of our business comes from our jewelry purchase plans, and that's kind of sustained even at this point in time. Although we are seeing more customers prefer the new Golden Advantage over Golden Harvest, which is very logical and probably a more appropriate solution for these kinds. That being said, even our sales through golden -- our sales through the gold exchange program have gone up, both the Tanishq exchange program where people come back to upgrade their Tanishq jewelry as well as those who bring back old bar and [indiscernible]. And almost like we've been saying more than 50% of our business today has an element of exchange of either type. And in quarter 3, we saw a good jump in that. Yes.

No, you can so broadly, can we understand that 70%, 75% of your business is relatively immune to voice volatility? Is this the right answer?

There will be like a double accounting between these 2 because there are those who also -- there is a A Section and B as well. So I don't have a figure right now to give you. But our idea is to move in that direction that in the direction that you are alluding to because that's good for business, and it's also good for the consumer. So directionally, that's where we want to move, but it may not just be -- there will be an intersection between the 2 as well.

And just to add one clarification that in gold exchange program upsell also happens. So to that extent, upsell element having impact of gold price but customer is taking it in stride right. So all these intersections are there. So straight driving 75% is not right.

Yes. I think I would just add a comment here. The -- I think nobody can be immune from gold price increase, even if you may be exchanging 100% or you may be having a Rivaldi Advantage plan. There are enough people who may change their mind when they see gold prices have gone up substantially, they are not in a position. So I think it's a very -- I would stay away from making that assumption that you kind of alluded.

Last small question from my end. So [indiscernible] growth is 11% with ASP contributing about 5%, 6% of that. So the volume growth is still low at 5%, 6%, right? I'm talking about the customer level sales in [indiscernible] business. [indiscernible] One, we were working on the margin mid-premium end of the market, right, as I indicated in the analyst meet. So what has driven this increase? And the subpart retail as in when do we expect the volume growth to pick up in jewelry business?

This is Arun here. Thanks for your question. See, as far as Q3 is concerned, our domestic growth was almost 0.8%, 0.5%, right, that was overall growth. And in terms of volume, the volume growth was around close to 9%. But the way in ...

The UCP sales, right? So that is reported in the PPT.

Yes, The UCP sales it's 11%. You're absolutely right. So the omnichannel sale what we have reported is 11%. That's the revenue growth. And this revenue growth has been reported by a volume growth of close to around 8%. So from a volume standpoint, it is more or less within our [indiscernible]. This is what we have estimated around an 8% to 10% growth. So this is what we will continue to deliver. So that is what it is.

Any system focus that we had indicated earlier, we were targeting value and mid-premium? So what is mid- to [indiscernible]?

Yes. So in terms of our positioning, right, I mean, [indiscernible] is positioned as a multi-price multi-brand destination. So when it comes to multi-brand, today, we offer anywhere between 15 to 20 international brands. So there is a kind of a tailwind for premiumization through our international brand collaboration. And yes, quarter 3 has also been aided by a ticket size increase because normally, November and December, we see an NRI season effect. And it has a direct correlation on the international brand. So we had the benefit of the ticket size also going up in November, December.

[Operator Instructions] We take the next question from the line of Siddhant Dand from Goodwill.

Excellent set of numbers I just wanted to ask, which geographies have contributed to the international profit. And are there still new stores that are profitable? And what would be the average margin in the mature stores?

So Siddhant,, I will give you one color that international margin had at least one time this quarter because we had some primary sales of INR 200 crores close to that, and that has -- but if you adjust that margins about 5% to 6%. And then gradually, it is going up as we have always talked about from the loss to gradually, it will improve will reflect jewelry margin, which we have in India. But at this point of time, 5%, 6%. We, of course -- all the stores because of the high more complex product instead jewelry ratio being high in North America, but operating costs also being high, more or less margin profile remains same as you see in India. So there is nothing significantly different in international market.

Okay. Could you just elaborate on the exceptional item?

Okay, so we had INR 194 crores of primary sales by our Dubai to Damas for some of these 2 stores, which we are getting Tanishq converted into Tanishq. And because Damas consolidation is starting from first January until that, it was norm, so that is kind of sale of our Dubai region where this additional profit is sitting. But from 1st January onwards, when Damas starts getting consolidated, then these kind of transactions will get eliminated. But before 1st January because these transactions happen, they could not be eliminated.

Understood. Understood. Any update on what percentage of stores will be converted to Damas? Or what percentage of revenue will be converted -- sorry, will be converted to Tanishq from the Damas.

No, there is nothing like that. Damas will continue to grow on the Arab segment, and they will continue to grow their retail network on that side. There were few stores which were in the catchment, which was more appropriate for Tanishq kind of offering and some of those stores are getting converted. You will see some of the quarter 4 also, and we will report that as -- when we [indiscernible] quarter. So some more stores will get an apart from these two. But if our assessment, and we don't have the final number. But it is not a very, very major activity. So Damas will keep growing with the network on the RF side of the segment. Yes.

Okay. That's great. My second question was regarding the TEAL margins are there some exceptional seasonality that you mentioned. Just a broad range of what kind of margins could we expect that business to have, just conservative number.

TEAL is a project business where we do percentage of completion method on a part of business, which is automation solution because they do projects. And that margin will reflect nature of projects which are getting executed in that quarter and some ups and downs can happen. Manufacturing Services business, which is the second part is more stable product kind of business. And combination of these 2 [indiscernible] still not that scaled up entity, you can see these margin variations. But I can only tell you team is doing well with a good order growth and good visibility for the future, but quarterly margin ups and downs you might expect in future also.

We take the next question from the line of Jignanshu Gor from Bernstein Research.

Good numbers. I wanted to check on the jewelry business. We have, of course -- seem to have ramped up our activity marketing efforts, both discounting gold streams, et cetera. And then as I think we discussed the margin has taken a hit on a normalized basis. I think my question is in the longer term, what do you if this gold price stability does not happen during the year? Would you want to revise how you approach the problem you are solving? Is it a margin profile? Is it ROCE? Is it absolute margin growth? What are we really solving for? Or is it market share in revenue terms? And how do we think about your approach to decision-making?

Jignashu. This is Ajoy Chawla. I want to first make a few observations and correct you slightly. Firstly, our approach has not been to drive discounting to grow. That is part for most festive season and other occasions, and it's been there. If not [indiscernible] if you ask me than most. In fact, our discounts have been slightly lower, if you ask me then more in fact, our entire approach has been to create excitement in the customers on 2 comps. One is the freshness of products and product innovation and campaigns which kind of appeal to them and showcase these. And the second piece is to leverage exchange as an emotional connect with customers. We have had offers in exchange all along. This time, what we did was make it a different kind of narrative, which is based on the fact that we import a lot of gold in this country. So I think these are the 2 fundamental shifts that have happened. And therefore, to that extent, will the discounting or something that has driven down gross margins or something like that. No, that's not the honest answer is it's business mix as Ashok says because jewelry has become a larger share of the business. And within jewelry, the rising gold rate has impacted the studded margin as it is expected to which we've explained earlier in terms of the material cost, relative weightage of gold and diamonds in the material cost. And thirdly, it is to do with gold coin in a period like this of rising gold prices as well as festive quarter, where the product mix within jewelry also and there was some change. So frankly, these are the only pieces. Now where the operating leverage will continue to kick in, it depends on the scale of the business. We believe it should. But I think as Ashok pointed out, please start looking at absolute growth in our EBIT and PBT and compare it to the absolute growth in gross contribution in absolute overall growth, that might be more relevant. Once gold prices stabilizes, maybe we can come to some understanding of where it settles down.

Okay. That's helpful,. Second question was on CaratLane. So we saw a significant margin uptick here but there's no specific mention of any base effect here for custom duties or anything. So I just wanted a bit of color on how to look at the CaratLane margin performance, especially as you rightly said, which studied sort of also going down a little given gold price. So what has really led to it? And how should we think about it in the future?

Ashok will respond to this.

So CaratLane has a high proportion of trade, and that is where the last quarter, there was some impact of custom duty, but it was not so significant like Tanishq jewelry business that we needed to call out. There was some element of that for sure. As you are aware that there has been operating leverage at play in CaratLane, which is available from the financials of CaratLane. The studded proportion has slightly come down because they also introduced 9 carats, 14 carat modern gold, which is getting good traction and particularly in the online space and gifting space, et cetera. So I expect that overall margin we had -- if you remember, a couple of quarters back, we had said that gradually, CaratLane with scale will start inching towards double-digit EBIT margin. And I think they have reached -- they are maybe slightly earlier than what we expected, but I think they would stay there low double-digit margin EBIT profile, at least, I would say. I think if Saumen is on the call. He wants to add anything. Saumen, are you on the call?

Yes, I am. Can you me?

Yes, we can hear. You can add, if you want to.

Yes, sure. No, I think you pretty much covered everything. I think our stated ratio is in [indiscernible] to 90%. We have been hit by the escalating gold rate in quarter 1 quite badly. I think we recovered a bit better in quarter 2 and quarter 3. That's one part. And I think revenue growth was the single largest factor. And we have been consistently managing our cost over the last 6 quarters, if we look at our figures. I think -- so revenue growth and cost management are the 2 main factors, and recovery from the margin drop that happened in Q1 as we sit that I would attribute the Q3's profit performance. And in production of 9-carat diamond jewelry, Shire Daimler and Diamond combination, they are low in terms of contribution today, but they have a positive impact when it comes to margin.

Okay. That's very helpful. Just a clarification on this. So stated growth in volume terms. is broadly same -- as stated share in volume terms rather is broadly the same as last year. Is that a fair...

I think we'll let that be. We'll give you more details in the Investor Day. Saumen will share a little bit during the Investor Day.

Yes.

We take the next question from the line of Harit Kapoor from Investec.

So just two questions from mine. The first one was on domestic jewelry. So over the last 6 months last 2 quarters hasn't been kind of positively surprised the level of gross contribution you've been able to hold as well as the relative [indiscernible], if I can call it back on the grammages, while they obviously would have declined, but has both these elements kind of surprised you? And in that context, your comment on kind of consumer behavior and expect it going forward also would be helpful. That's my first question.

So I won't answer the gross contribution. I'll let Ashok answer that. But I'll just talk a little bit about the consumer and how we are looking at it. I think if you step back and see, the -- there was a lot of people on the fence if I go back to quarter 1 and quarter 2. Waiting for gold price is to correct. That's my reading, if I recollect right. And the moment they saw that gold prices are only going up and there were enough rumors in the market that will continue to go up. And then the festive season came followed by the wedding season, lot of customers really jumped in on account of this entire FOMO, fear of missing out, and I feel that is continuing even now. It remains now. Of course, with the volatility in [indiscernible], maybe it might stabilize a bit or people may once again think pause and wait. So I think that's the larger consumer story, which is why we are seeing that we've been able to grow. The second piece, I think, is more internal to us. I think our teams have gone out on a limb extensive work on product, on retail, on customer outreach on exchange. And I think fixed volumes for the exchange -- for the execution that has really played up. So I think somewhere some credit also goes to the team for having done that. On gross contribution, I'll leave it for Ashok to answer.

Harit, I don't think we specifically and separately disclosed jewelry gross contribution. But maybe you are taking Titan as a proxy for jewelry. And to that extent, we explained in the earlier question also that those elements are playing out, particularly in the last 5, 6 quarters, where gold prices are going up in a very, very accelerated manner. And as long as this trend continues, except in January 1 time, we saw really huge volatility and corrections. But again, it has started going up. And what we are told by people like you and [indiscernible] that structural things underlying gold business stay. So one can expect that gold prices might continue to go up. And in that environment, there will be stress on some parts, we've been able to mitigate through operating levels. As long as we are able to deliver good revenue growth, we will get operating leverage and able to maintain EBIT level or PBT level margin.

Great. And the second question was on earlier participant have asked about formalization, but my question from the perspective of in an environment where the cost of those business, as far as inventory is concerned, dramatically goes up, and the entire market doesn't have the balance sheet that you do. Do you expect pace of expansion in the industry to kind of relatively slow down roughly. But generally, to slow down, given us the inventory cost is so high is primarily a cocoa model x your business. So just some thoughts on that.

It's difficult to comment on how the industry will behave. It will be very speculative. I think we should wait and watch how it plays out. It's been only a few months. To draw conclusions of a long-standing nature on that may be inappropriate.

But certainly, it puts us, I would say, a good comp, not huge, but it's an advantage quantitative advantage for us. But we are able to at least fund our inventory, I think, better than others.

We take the next question from the line of Amit Sachdeva from UBS Group.

Congratulations on great set of so my question is on the student base. And just wondered your commenting on how the consumer behavior in this segment is shaping up. Now that you own gold [indiscernible] LGD, which is on one set of consumer value proposition and finish gain on the other. But I also know that higher [indiscernible] landings growing faster, but at bit under pressure, but we also launched lots of things in sublet segment. So just on your kind of input here how this business behavior shaping up? And also the promotion in that context, how it is responding to some of the initiatives and price points that you have taken? So some color on that would be very helpful.

Sure. Amit, Samit, Arun here. You're right in saying that we have been seeing pressure sub-1 lakh not 1 to 2, but sub 1 lakh in studded jewelry, but also with gold rate behaving the way they are also in gold jewelry. About 1 lakh is a different picture for studded jewelry. And a lot of efforts from our side, like I said earlier, to keep jewelry accessible has really been top of our mind. And what you see even in January with the festival of diamonds and with a new face to our Delhi where studded portfolio with Anandia the et cetera efforts we are doing to move that customer back into the store. So as we said, continues to be high on our priority. I don't think -- I mean it will take a lot more effort for us to do that. So I will only leave it by saying that let's say, the trends that we are seeing in a sense, maybe the slowdown in less than 1 lakh may be a doing a bit. We're not seeing that. And even in January, we are seeing some early signs of results from the efforts we are putting. But to be honest, it will take a lot more than that to win that customer back, given what we are seeing in terms of price inflation here.

So I have one additional comment to add here. As a portfolio of brand between tonnage which has a substantial contribution of buyers in the sub-1 lakh of 50,000, Mia, CaratLane and hopefully, going forward in the future beyond which is a different kind of play, I think we should look at the portfolio play eventually, and that's our game plan to ensure that we own that customer in the sub-100,000 space. And more importantly, bring in many more customers in the studded space in the sub-100,000. In fact, the stress on gold in the sub-100,000 buyers is far higher than started. So which is fine. We understand there will be different solutions.

Got it. That's very helpful. So just a small one here is that, obviously, last year, we've seen studded being teens and in last quarter was a bit better. In this promotion cycle, are we seeing a similar growth in studded the last quarter of acceleration or some sort of from a trend point of view, what so far we have seen in January? Is there a comment that you would give?

It's too early to call that, Amit. Having said that, I would say that quarter 3 has been better than the period prior to that. But quarter 4 will allow us to wait and call it out at an appropriate time. It's perhaps a little too early. Also our festival of Diamants is a longish campaign. So we'll have to wait and see how that plays out.

We take the next question from the line of Mihir Shah from Nomura.

Sir, firstly, one clarification on ticket size, assuming constant gold prices, is there a material swing or difference in ticket size across quarter. So usually, third quarter is the highest sales for you. So does wedding in festive quarter have a material difference in 1.9, very material different for the remaining 3 quarters? Just for clarification that, sir.

Yes. So I mean, there are 2 forces, so to say, on is consumer mix and the needed mix. And second is the gold rate increase. So what we are seeing in quarter 3, we are seeing play out in quarter 4 as well because it is also a wedding quarter. And we have seen gold rates increase significantly even beyond December into January. So yes, so we are seeing quarter 4 to behave similar to quarter 3. So I'll just add.

One more flavor on this. Typically during [indiscernible], there are a lot more people who come in many new buyers also because they buy small tickets. They buy coins, they're all kinds of. So actually, during those periods of 15 days, you normally end up seeing a slightly lower ticket size. But as Arun said, during wedding purchases, et cetera, you see higher ticket size. And during festival of diamonds or an activation, you see higher ticket size. I take it.

Understood. So assuming the swings across quarters will not be as material is predominantly the understanding.

That's correct. You're right.

Secondly, despite...

Ladies and gentlemen, we have lost the line of the participant. We'll move on to the next question from the line of Jay Doshi from Kotak.

Congratulations on great execution. The question is in the past, you've indicated that passing on looking charges to consumers in gold price environment is gradual over a couple of quarters. And so you -- in where we saw some within margins. When I look at this quarter's performance on a Y-o-Y basis, despite all the margin headwinds, be it mix or in a volatile environment, our EBIT growth is exceptionally good and strong. So my question is, are you positively surprised by the acceptance of making charge as a percentage of sales in this upcycle of gold price. Or is this kind of behavior that you would have expected in any case at the beginning of the quarter.

This is Ajoy here. I'll take that question. What we are seeing so I think there are 2, 3 things at play. Firstly, there is a slight shift in the repeat and new buyer contribution. If you see by contribution compared to year-on-year is 3 percentage points down. And typically, they come in at lower ticket size, whereas repeat by has come at higher ticket size. Secondly, because of wedding and the repeat buyers being high, we typically find a richer product mix that we are [indiscernible] compared to new and, let's say, non-wedding. The third, I like to say, which is -- which goes off of the direction because of higher gold prices, there is a tendency for customers to kind of slip down the complexity order, which I mean is that instead of buying very high making charge products, they may tend to slip slightly medium size medium complexity for us. So these are 2 forward and 1 backward. And there's 1 more forward, which has helped us a lot in quarter 3 is the collection that we launched was phenomenally successful. It so happens to be -- we did exceptionally well with the Mariana election and the campaign which the team put out. That created desire, what I would call is irrational desire. So I think all these 3, 4 factors combined have seen the outcome that you are seeing. And the final point I would say, which is not related to gold, but to do it started, the team put in a lot of work in doing many high-value exhibitions across the country that has helped a lot in the quarter, and I'm sure will continue to help us in this quarter 4 as well. So all these forces have come together to kind of give you the outcome. Many of them have added together to give us a big bumper quarter. Let's see how things go on as we go forward.

We take the next question from the line of Vivek from Jefferies.

A couple on the gold price. One is not very long back, there was this concern that not concerned, but there was this debate whether the younger generation prefers gold as much, whether as an investment class or assumption category. Do you think that the way which prices have gone up so much excitement around EPS and I'm sure you would have seen VolTFdata yesterday. Do you think that also to behavior and [indiscernible] generation will be far more geared towards gold versus what could be other way.

Now looking at the performance of CaratLane and Mia in our portfolio, we are actually seeing youngsters stay with us and continue to be invested in jewelry, both as an investment as well as for a dominant more. And whatever we are doing on to keep products exciting in terms of new collections across all our brands is also kind of keeping them excited in the category. So we are seeing an adverse move here. We're only seeing a good response to the excitement that we are bringing in, both in terms of the store additions that we have done, which is quite significant for Mia and also in terms of the new collections and campaigns that we are bringing out.

Okay. Sure. But from a medium-term perspective, how do you think about this billion because Mia currently in a still entry level? Do you think the interest level of younger generation gets much higher because of all the narrative around gold and the fact that it has somewhere the consideration set, whether it's ETF or gold jewelry, do you think something changes or we don't think as much as you gauge today?

No. We are seeing -- I mean we are seeing it stay positive, which is why our investments in store expansion continue to be fairly robust on both on Mia. So we are taking a positive view of the future.

It's positive only. Even from what I gather, anecdotally, both CaratLane and Mia have had enough inquiries for gold products. They may do different kinds of gold products, 18-carat or modern good. Tanishq has seen good modern work. So I think, by and large, I would stay on the track of what Arun said, even younger customers are interested in gold and that may sustain.

Got it. And the second point on this gold price bid. And again, I'm not sure if I'm not at least come across [indiscernible] also. But in a scenario where gold prices are moving up, does also worry let the customers could go into a neighborhood store, just from a gold purity perspective or otherwise or availability [indiscernible] and that benefits organized players including yourself?

Quite likely.

As the last question and conclude the question-and-answer session. I now hand back this over to Mr. Ajoy Chawla, for the closing comments.

Thank you. It's been a very good quarter, and thank you for all the wonderful questions that keep us thinking. Look forward to interacting with you soon. Bye. Take cash.

Thank you. On behalf of Titan Company Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.