Today we’re breaking down India’s largest jewelry business, Titan. Titan is also the world’s fifth largest watchmaker and as of early 2023, is worth $30B in market cap. We cover the importance of jewelry to Indian consumers, the intricacies of retailing across India, and how Titan stands head and shoulders above its competitors in terms of profitability.
Our guest is Saurabh Mukherjea, founder and CIO of Marcellus Investment Managers. Please enjoy this breakdown of Titan.
Show Notes
(00:00:00) – Introduction
(00:02:45) – (First question) – What Titan is, where it operates, and its size and scale
(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
(00:14:52) – 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
(00:27:36) – 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