Indian gold prices hit record high levels this week, while global gold is trading at a 7-year high. Could this have an adverse impact on jewellery demand is the big question,
S Subramaniam, CFO of Titan said he was not sure if there was any major impact on consumption due to both the gold prices and the coronavirus in. "The impact of coronavirus on our business is extremely remote or small because although we do rely on some supplies for watches from China, as of now we don’t see a stock situation where we are deteriorating. We are hoping that the production will start in the short time. So the impact of that is not much. "
"Clearly, on gold consumption in India we have not seen any issue of coronavirus on any of our things,” he said.
“As far as gold is concerned, prices have shot up in the last few weeks maybe but luckily we haven't seen any major impact of that on our sales. This could be because of two reasons, one is that people are now looking at gold as something which will be going up over a period of time and secondly, there is the wedding season which is on,” he added.
When asked if the 11-13 percent revenue guidance stands for the month of February, Subramaniam said, “For the quarter, I would still go with that sort of guidance. It looks like we should be able to target that and achieve it. March is a big month but February being almost over, we are possibly still in line to achieve that.”
Talking about demand for gold, he said, “It is quite expensive to buy gold today. At the same time, if because of these issues like the coronavirus or other aspects like the microeconomic global situation where gold prices are going up, we may start seeing people looking at gold as an investment. Therefore, there may be some pick up there but that would still be more on the ETF gold coin side rather than on the jewellery side. Jewellery is still driven very much by festivals and customary requirements.”
On their eyewear and watch business, he stated, “January has not been bad. This quarter, overall, we may be reasonably decent in terms of both these divisions. I don’t think consumption has been hit so badly there. It is low but not as bad as in December.”
“I would think we are possibly at the bottom. If anything, we should start getting better over the period,” he said.
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