Business Breakdowns
Episode 105 Titan: A Golden Case in Indian Retail
Business Breakdowns

Episode 105: Titan: A Golden Case in Indian Retail

Business Breakdowns

Episode 105

Titan: A Golden Case in Indian Retail

Saurabh Mukherjea is the founder and CIO of Marcellus Investment Managers. We cover the importance of jewelry to Indian consumers, the factors behind Titan's growth into a highly profitable juggernaut, and why retailing in India is still a gold mine of opportunities.

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(00:02:45) - (First question) - What Titan is, where it operates, and its size and scale

(00:05:22) - Their various business lines and getting a sense of their topline revenue streams

(00:06:50) - The bulk of the demand when it comes to Indians buying gold 

(00:08:24) - Getting their start in watches in the 80s and evolving into what Titan is today 

(00:13:19) - Breaking down the factors behind their twenty percent annual growth rate

(00:14:52) - What a typical Tanishq store looks like and overview of store economics

(00:18:58) - How their return profile is changing and what types of stores they want to open

(00:23:51) - What gold on lease is and the implications of it for their business model 

(00:25:33) - Why make jewelry when they could just be selling gold for savings purposes

(00:26:23) - How much debt they carry and other noteworthy financing arrangements

(00:27:36) - Managing inventory and keeping costs under control at the store level

(00:31:54) - Whether or not they have artisans spread out across the country and difficulties of shipping and

freight at their current scale in India 

(00:33:38) - How they’re attracting customers to stores and store-level marketing strategies

(00:37:57) - Splitting their business into middle class, premium, and wedding jewelry 

(00:39:22) - Where e commerce figures into the scope of their business

(00:42:47) - Thoughts and philosophy on allocating surplus capital and acquisitions 

(00:45:38) - Additional competitive advantages Titan has

(00:48:42) - Building brand trust in a low trust economy in such a short time period 

(00:50:22) - Where future growth will come from and if they can sustain their current growth rate

(00:54:04) - The bull case for their business and what a Saree is

(00:57:03) - Risks the business faces as they look out at the future 

(01:00:12) - What he’s learned as an investor studying Titan’s business

Titan: A Golden Case in Indian Retail

Introduction

Dom
This is Dom Cooke. And today, we're breaking down India's largest jewelry business, Titan. Titan began life as a watchmaker in 1984, through a joint venture between India's biggest conglomerate Tata Group and the Tamil Nadu State government. While the watch business was initially successful, a troubled foray into Europe, left it on the brink of survival by the early 2000s.

A strategic pivot to focus on jewelry proved a masterstroke and the business has since gone from strength to strength. Today, the vast majority of its $4 billion of revenue come from its collection of jewelry brands and Tanishq, in particular. As of today, Titan has a market value close to $30 billion.

To break down the business, I'm joined by Saurabh Mukherjea, the Founder and Chief Investment Officer of Marcellus Investment Managers. We cover the importance of jewelry to the Indian consumer, the intricacies of retailing across India and how Titan stands head and shoulders above its competitors in terms of profitability. We also explore other products in retailing that may lend themselves to their jewelry playbook. Please enjoy this breakdown of Titan.

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