Titan Company Ltd (NSE: TITAN) Q3 2025 Earnings Call dated Feb. 05, 2025
Corporate Participants:
C K Venkataraman — Managing Director
Ajoy Chawla — CEO, Jewelry Division
Suparna Mitra — CEO, Watches & Wearables Division
Ambuj Narayan — CEO, Indian Dresswear Division
Unidentified Speaker
Saumen Bhaumik — Managing Director, Caratlane
Analysts:
Aditya Soman — Analyst
Abneesh Roy — Analyst
Avi Mehta — Analyst
Devanshu Bansal — Analyst
Videesha Sheth — Analyst
Sheela Rathi — Analyst
Jay Doshi — Analyst
Amit Sachdeva — Analyst
Tejas Shah — Analyst
Kunal Vora — Analyst
Harit Kapoor — Analyst
Vivek Maheshwari — Analyst
Presentation:
Operator
Ladies and gentlemen, good morning and welcome to the Titan Company Limited Q3 FY ’25 Conference Call. [Operator Instructions] I now hand the conference over to Mr. C. K. Venkataraman, Managing Director of Titan Company Limited.
Thank you. And over to you, sir.
C K Venkataraman — Managing Director
Thank you very much. Good morning, everyone, from this beautiful campus on a beautiful Tuesday morning in Bangalore. And it’s been a very, very good quarter for Titan Company across the board. And we can straightaway jump into the questions that you’ll have.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Aditya Soman from CLSA. Please go ahead.
Aditya Soman
Hi, good morning. Sir, two questions from me. Firstly on jewelry, can you give us a sense of how you expect sort of margins to pan out? We’ve seen a sort of significant bump-up in studded growth in the quarter, but if I look at the margins relative to the growth, at least the EBIT growth, still remains a little bit lower. So I’m wondering if we see a further aspiration in the EBIT growth in 4Q, normalized for this one-off inventory impact of the customs duty.
And the second question on the analog watches. I think, again, a very strong growth here. Do you see yourself, sort of, also building out more lower-end analog watches to drive faster or, sort of, more broader growth in that category?
Ajoy Chawla
Yeah, I’ll go first. I’m Ajoy. I’ll go first on the jewelry margins. Yes, it’s been a very good quarter and for studded as well. Now, what’s happened in this quarter is that the rate at which gold is growing is kind of exceeding significantly the rate at which studded is growing. And in our minds, we see them as two independent opportunities and therefore, we maximize growth on both fronts.
As a consequence, the ratios kind of swing here and there, and that plays up in the way the GC and EBIT margin percentages start looking like, though an absolute crores and growth in absolute dollar terms, in terms of GC or EBIT, is something that we are very happy with.
Gold coins, particularly in Q3, which is normally very high in that festive quarter, but this time it was even further, perhaps reflective of the high gold — interest in gold as an investment instrument, given the way gold prices have been going. So that’s one big factor. This is beyond the custom duty one-time impacts of — in the quarter.
The second big factor that is playing out is the — there is a certain dilution in the GC percentages for studded, largely because of this unprecedented rise in gold price. I had explained this earlier in a previous call, maybe previous couple of calls, I think, that when the relative weight of gold versus diamonds in the studded product category by itself changes, thanks to the price rise in gold, given the differential margins we earn on gold or stones, there is an impact of this gold price on the overall GC studded percentages. As a consequence, with spiraling gold prices, there is likely to be some impact on the line-item level GC studded, and therefore, that also shows up.
So these are the two main factors which have played up in quarter three. And we believe this could continue to play. It’s very difficult to predict given the way gold prices have been swinging upward even in the month of Jan and Feb, thanks to whatever is happening in the US and the dollar is going up. So there’s a lot of volatility and therefore, one can’t rule out GC dilution. But we have been trying to make up some of it through other initiatives.
Some of those take time to catch up, whether it is on material cost or also on overhead management. But, yeah, therefore, long story short, I think we can expect to be anchored around the current levels of EBIT margins and for an annualized basis between 11% to 11.5% is what I think we are likely to realistically achieve, though, absolute growth in profit and absolute growth in EBIT and GC is something that we constantly target. And we should look at that perhaps more than just the percentage. Suparna?
Aditya Soman
No, understand that. Very clear. And maybe just a follow-up on that. Sorry. On the…
Ajoy Chawla
So maybe, do you want Suparna to answer your other question before that?
Aditya Soman
Yeah, sure.
Suparna Mitra
Yeah. So, the — your question was that would the mainstream — the middle end of the market of watches, would it be growing? So we are seeing, of course, very good growth in the premium segment. In our premium brands like Edge, Nebula, Xylys, we have seen more than 50% growth. But, I’m also happy to note that we are seeing very good growth in brands like Fastrack and Sonata, which are in the more affordable space.
And in Q3, for example, we’ve seen 33% growth in Fastrack and 24% growth in Sonata, which is about a lot of product and restaging and new products. So the product strategy is working well in terms of the value and the fashion offered at those price points.
Titan, which is the flagship brand, and Raga continue a very good growth. So, unlike maybe a year, a year and a half back when we were seeing good growth in the premium, but the economy ranges were not performing well, now we are seeing both the engines — premium continuing to do very well and even our more affordable brands are doing better.
Aditya Soman
Thank you. That’s very clear. Thanks, Suparna. And just one follow-up, Ajoy. So the diamond prices on their own wouldn’t have come off, right? I mean — or diamond specifically. I mean, I understand gold mix going up and then the price of gold going up, bringing down [Speech Overlap].
Ajoy Chawla
No, no, no. We have not seen that. Yeah. Whatever has happened has happened in big stones, that too at the wholesale price level. So we are not seeing any diamond price dilution per se.
Aditya Soman
No, that’s very clear. Thank you.
Ajoy Chawla
Thank you.
Operator
Thank you. The next question comes from the line of Abneesh Roy from Nuvama Wealth. Please go ahead.
Abneesh Roy
Yeah, thanks. My first question is on the emerging business. Ideally for any company, emerging business should be the fastest growth. Unfortunately, for you, it seems to be the slowest growth. And we have seen only one store addition in Taneira and Taneira growth is flat.
So is Taneira the only reason behind slow growth? And in Taneira, do you need to go back to the drawing board in terms of pricing, design, etc.? And would you go slow till you figure out what’s happening there, because in marriage season, ideally, Taneira should have seen a good growth?
Ambuj Narayan
Hi, Abneesh, thank you for that questions. Ambuj here. So you’re right, Taneira’s sales growth was flattish, but if you look at our retail growth, we grew by 30% and our buyer growth was 38%. The reason why it looks flattish is because last year we had opened seven L3 stores during quarter three and whereas this year we opened only one L3. And we also allowed for some inventory correction in some L3 stores.
Having said that, we have also introduced a lot of new products at accessible price points across sarees and non-sarees segment which has received very well — which was received very well by our customers, both existing and new. And that actually brought down our AUCPs. But it delivered the required buyer growth, though, I think we could have done better if we had gotten more new buyers. So that’s what we are working on right now.
We opened only one store in this quarter, but we are continuing to — we will continue to open stores, but now we are focusing more on metros and Tier 1 cities and not going to smaller towns. So there has been a small change in our strategy and we’ll like to populate more stores in the existing and operational cities.
Abneesh Roy
Okay. One quick follow-up on watches. So good numbers. So how much of this good numbers in terms of double-digit revenue growth and margin expansion is because of the marriage season, and next two quarter also marriage season is strong? And second is, would you see the wearables declining sharply for you and industry as a blessing in disguise because there was no big right to win there and clearly, customer fatigue is also very high, and your right to win in analog and premium is much, much superior and much stronger. So would you see that as a blessing in disguise?
Suparna Mitra
So I’ll take the first question first. The — yes, watches — analog watches are very large — in our estimate in retail, it’s — more than 50% is for gifting. And we know a large part of that is for wedding. So, weddings do have a direct correlation, especially in the higher priced watches. In fact, interestingly it would — we would imagine that watches bought for wedding — for gifting are lower priced than for self, but we have actually seen there is no difference. So wedding season does have a good correlation. And I think that along with a slew of very attractive new products, should work in our favor.
The second question is on wearables. So yes, the category was led by a certain paradigm and of course, now we see a very big correction in the category. And we are actually at the place when we are relooking at our strategy and playing to our strengths, which is a lot of consumer centricity, design, product, trust, assurance, quality, access of customers through our channels, and higher price points. And I think that strategy has already started seeing some green shoots. And we should be able to implement and see the results in the next, I’d say, six to 18 months.
Abneesh Roy
So thanks. That’s all for my side. Thank you.
Operator
Thank you. The next question comes from the line of Avi from Macquarie. Please go ahead.
Avi Mehta
Hi team. Thanks a lot for this opportunity. Sir, I just wanted to kind of follow up on the studded jewelry — on the jewelry margin aspect. So, where are we in the journey for normalization of the studded jewelry margin and how long do you see that kind of taking to kind of reach there? Because you did allude towards making adjustments in the product portfolio.
And where I’m trying to get to is, this 11%, 11.5% when do you see it kind of moving to 11.5% to 12%, which is historically the margin range that we’ve been able to achieve on a steady state basis? That’s my first question, sir, if you could — and I’ll come back on the watch segment with the second question up here. Thank you.
Ajoy Chawla
Sure. Sure. Thanks, Avi. So I think it’s actually very — becoming very difficult to predict how the gold rate will continue moving and how much it will continue to move. If it accelerates at the rate at which it is going, sometimes 5% within a month itself, it becomes extremely challenging to kind of sense.
Overall, if you see, over the last one year, it’s a 25% jump in gold price. And diamond prices have remained where they are. So consequently, the weighted average material mix — material cost mix is swinging quite a bit. And all initiatives that we can take, it’s not going to swing it overnight like this, it takes time. And product mix is also — one is what we put out there, the other is also what customers prefer.
So, many complex forces, and I’m sorry, I’m probably giving you a roundabout answer, but GC on studded where it will stabilize, when it will stabilize is slightly difficult to predict. What we do look at is how the total GC growth in studded is happening or how the total GC growth for studded, plus gold, plus coins is happening quarter-to-quarter, year-to-year, and over the next two, three years. So, therefore, these percentages which perhaps play a significant role in your predictions, hold lesser, let’s say, weightage in our workings because we have to maximize on all fronts.
And therefore, whether this 11% to 11.5%, when it will move up on account of operating leverage, that question also becomes difficult because we are constantly also investing back in growth, because we are prioritizing growth, given the headroom and the opportunity and the single-digit market share that we have, and the formalization forces and India opportunity. We think it would be appropriate to chase growth over margins. And in a way, that has been our enduring strategy.
C K Venkataraman
Also, continuing to deliver exceptional customer values, defending and increasing shares in individual cities and states and delivering really leading class shareholder return. So it’s — actually that is the combination that Ajoy is referring to while growing. So, that’s the perspective you should have on this.
Ajoy Chawla
And just one more element. We focus also a lot on two other aspects of growth. One is buyer growth because that is volume for us and that’s very critical, top of the funnel. And the second, buyer growth, again, by gold and studded, independently. And the other thing that we focus a lot on is same-store growth, because that’s what really gives the kicker in many ways, even while our expansion plans continue.
C K Venkataraman
Because one of the unusual things in this category may not be that apparent, that while everyone, by and large, at least the people that we compete with, are all marked and the making charges, for example, in gold is all in percentage terms, but as the price of gold keeps rising, a 5% difference between us and another leading player, let’s say, in Delhi, that 5% translates to a higher and higher amount every day or every month, every week.
And it’s not — customers don’t simply see it only as the same 5%, it is now INR400, INR500, INR1,000, and so on and so forth, that difference. And, therefore, we have to do a lot of juggling to deliver — continue to deliver customer value. So it’s quite a complex tightrope walk that the business has to do to deliver to multiple stakeholders.
Operator
Thank you. [Operator Instructions] The next question comes from the line of Devanshu Bansal from Emkay Global. Please go ahead.
Devanshu Bansal
Hi sir, thanks for taking my questions and congratulations on a very good quarter. Ajoy, jewelry SSG has clearly improved from 15% in Q2 to 22% in Q3. We have not seen a secular uptick in SSG trends for other listed peers, where they are either similar or slightly lower versus Q2. So just wanted to check on what corrective actions have we taken to see this growth improvement and how sustainable are these growth initiatives.
Ajoy Chawla
I think we focused a lot on — as I said, buyer growth is one story. And in this quarter, particularly if you ask me, what has helped is ticket size growth, particularly in gold because of the upswing on wedding-related purchases and occasion purchases. Even in studded, while we saw healthy buyer growth, in fact, the buyer growth in studded was healthier than that in gold, much healthier rather, I would say.
But, the value growth in studded has also got an additional kicker, thanks to a lot of high-value studded sales, where we are seeing very good traction. We did a lot of exhibitions of special collections, red carpet etc. We also did a lot of activity around wedding collections. We had the launch of Tarun Tahiliani and Rivaah Collab 2.0.
And a lot of exhibitions and customer outreach, especially to these high-value customers has happened which has resulted in fairly good ticket size growth, which comes typically from repeat customers.
So yes, how sustainable it is? Well, our efforts are sustainable. We will continue to put efforts. How much the customer response is also not entirely in our hands. But we continue to push, both on buyer and ticket size growth even in this quarter and the quarters ahead.
Devanshu Bansal
Thanks, Mr. Ajoy. Second, I wanted to understand this – there has been a sourcing loophole that has been plugged by the government in the budget where gold was being imported in the form of alloys. Do you feel this was happening in pretty large quantities and this can lead to some reduction in competitive intensity from a gold pricing point of view?
C K Venkataraman
Difficult to comment. Since we are not part of that kind of activity, it’s very difficult for us to comment.
Ajoy Chawla
Yeah, difficult. I mean anything which helps prevent or reduce illegal flows of gold in the country is most welcome is what I would say.
Devanshu Bansal
Understood. And — otherwise Ajoy, generally, are you seeing some rationality in competition from a making charge perspective given that gold is now being hallmarked and certain, as we discussed, major routes of gold smuggling are also being closed by the government? So any general — otherwise, are you seeing some rationality from a making charge pricing perspective?
Ajoy Chawla
Not so much making charge. I think, in quarter two the gold rate — price wars on the gold rate was quite intense. That seems to have kind of stabilized in quarter three. And perhaps, further cut on illegal imports, etc. might help in keeping the gold rates stable. Making charges, I think, it is pretty much what it was.
Devanshu Bansal
Got it, sir. That’s it for my end. Thanks for taking my question.
Ajoy Chawla
Thank you.
Operator
Thank you. The next question comes from the line of Videesha Sheth from Ambit Capital. Please go ahead.
Videesha Sheth
Yes, hi. I hope I’m audible. Thank you for taking my questions. The first one was on the studded, and sorry to harp on this again, but for Titan the studded mix has been under pressure. Appreciate that it’s the base effect that’s playing out where gold price is driving this. But when we look at your closest peer, the studded mix has been stable for them. I understand that it might be difficult to comment on competition but just wanted your thoughts on what could be driving this divergence.
Ajoy Chawla
So, in Tanishq, historically, we have been lower on the market share in gold vis a vis being the leaders in market share in studded. And for most of the other traditional players who are there, who have been largely gold-focused, and therefore for them the market share is lower in studded, whereas relatively the market share may be better off in gold. I think these could be playing out.
Plus, we are well distributed across the country; North, West etc., where studded plays a bigger role. So, again, market mix could be playing a role. Very difficult to comment, but as far as we are concerned, we are very happy with the growth in both. And if gold is growing fast, which means we are gaining market share, this is actually very good for us because it’s playing out exactly the way we want it to play out. So again, the absolute growth in individual segments is perhaps more important to see than seeing the share as a percentage, which is a win-loss in a calculation.
Videesha Sheth
Understood. That helps. And second was just two small questions on CaratLane. First one was just a clarification that do you stick to the potential guidance for CaratLane which was given out during your Annual Investor Meet and how do you see the trajectory moving along?
Unidentified Speaker
Yeah. Hi. We’ll just open Saumen’s line for answering it. Just a minute.
Videesha Sheth
Sure.
Unidentified Speaker
Yeah, hi. Saumen sir, you may please answer it. Yeah, hi.
Saumen Bhaumik
Yeah. Hi. This is Saumen. I think last two quarters have been good. Last quarter, in particular, we had good revenue growth. And that actually is the single largest factor. And we, I think, managed our overall cost quite well despite the dilution in margin which is because of customs duty and gold rate increase. The impact of these two has certainly made our EBIT percentage a lot better. But that is a bit of a Q3 phenomenon. It is not significantly different than previous year also with the low double-digit. So, overall, the effort would be in that direction to keep EBIT percentage rise. But this is only one quarter. We will look at quarter-by-quarter [Indecipherable].
Videesha Sheth
Right. And just the second bit on CaratLane, is it possible to share the catchment growth for 3Q or nine months given that SSG could be depressed due to higher store density?
Saumen Bhaumik
I didn’t get your question, please.
Videesha Sheth
Is it possible to share the catchment level growth for either third quarter or nine months given that SSGs could be depressed due to the higher store density, the cluster level growth or the catchment growth?
Saumen Bhaumik
Our overall growth in quarter three has been quite good. And I can give you some indication of our like-to-like store growth which is also very good, I think, 16% in quarter three and previous quarter is 21% which is significantly higher than what happened in the previous four or five quarters. Yeah.
Videesha Sheth
No problem. I’ll circle back. Thank you. That’s all from my side.
Operator
Thank you. [Operator Instructions] The next question comes from the line of Sheela Rathi from Morgan Stanley. Please go ahead.
Sheela Rathi
Yeah, thanks for taking my question. Sir, my first question was, you sounded very optimistic on the trends which we have seen this quarter. So any call-outs here in terms of geography-wise performance? And Ajoy, you also mentioned that buyer growth is important for us. So what is the mix of new buyer and existing buyer growth? And is there a diverging trend in studded and gold jewelry buying for new buyer and existing buyer? And is it fair to say that when you buy gold coins, it’s generally the new buyer who’s buying more of these gold coins because you also said that, we are seeing very strong trends there. That was my first question.
Ajoy Chawla
Yeah. So geographically for the quarter, South and East have grown faster than the national. North, which was a little subdued in quarter two, has bounced back very strongly for us. And West has been even, I would say, because there are some markets which have done very well and some markets are still a little subdued. So broadly, that’s the region-wise split of growth. We are seeing Tier 2, Tier 3 towns do better than the top metros. But then that has also been a thrust for us over the last several years and so much expansions have happened across all these markets. But, yes, overall that is there, aspirations are high.
In terms of new versus repeat, for the quarter three that was — that we had declared results for, 48% new and 52% repeat, that’s pretty much the pattern which was there even last year in quarter three. Typically, in festive quarter, there is always a lot of new buyer activity because many more buyers enter the brand for us. Now, gold coin is not necessarily a new buyer-oriented. I would say gold jewelry has been because that’s where we want to gain share by going deeper into regions or by simply seeing so many people are already gold buyers, so it’s easy for them to migrate to Tanishq from an unorganized space into gold first. Studded is something which happens later.
But off late, if I were to look at the last one, one and a half years, amongst a certain segment of customers, let’s say, younger, modern, maybe more urban, top towns, we are seeing enough new buyer growth even in studded, though, largely under the sub-100,000 price band and segment. And this happens across Tanishq, CaratLane and Mia. And perhaps, the many players which are there now in this new age space, new age competition, I would call them, which are mainly studded everyday ware, that is something which is emerging as well.
So in a way, new buyer growth comes from both, studded but mostly in studded on the more modern everyday wear jewelry. And in gold, it is more in the traditional space where we are gaining market share. I mean, broadly, that’s the way to look at it. Coins is something which is investment buyer, it could very well be an existing Tanishq buyer. There is no such pattern of new and repeat.
Sheela Rathi
Understood. And my second and final question is, I mean, Venkat made the point on how on a monthly basis the trends change on the pricing side and currency. Just want to understand, how should we think about the competitive landscape? Is it a monthly affair, quarterly affair in terms of the trends which you see, especially from the independent and regional jewelers, or is it more like a regular phenomena where you can see a trend and that doesn’t change very quickly? And also if you can just guide us on how the landscape has been, especially in the recent quarter.
Ajoy Chawla
So, competitive activity, yeah, of course, I mean all of us know and you would also obviously have it in the back of your mind is a daily affair. I mean, everyday things can change, but we review it. So, operating teams review it weekly to see what’s happening. It’s fairly dynamic. I look at it monthly. And perhaps at Venkat’s level and at the Board’s level it is a quarterly review, right? So, we tend to review it at certain periodicity. It’s difficult to answer whether it remains stable, it depends on so much activity.
But as we see it right now, at an aggregate level, I think the high levels of competitive intensity have been continuing for a while now and we see that to continue. Okay, player A may get replaced by player B. Player C may come and some new unorganized guy may suddenly become very active, or a new player may get launched in the market, while an existing player may run into some trouble, etc. Those are just incidentals. We watch them but frankly, we focus a lot more on the customer and see what we can do to win the customer. The competition is incidental.
Sheela Rathi
Understood. Thank you, Ajoy.
Operator
Thank you. The next question comes from the line of Jay Doshi from Kotak. Please go ahead.
Jay Doshi
Hi. Thanks for the opportunity. Sir, my first question is on demand. You’ve had a good 25% growth for the past two quarters. Do you think that kind of growth rates can sustain for a few more quarters, especially because gold prices are up 25%, 30% YoY? That’s my first question.
Second is on this 11% to 11.5% EBIT margin guidance. Is it at a consolidated level for jewelry business or a standalone level? And third is, Ajoy, you did mention about that your focus is on driving the absolute EBIT growth in the jewelry business, given that gold price increases are much ahead of expectation, so you are overshooting on the growth trends versus what you had given guidance at your Investor Meet. But at EBIT level, EBIT growth, what is that target in your mind that you sort of are internally sort of thinking, what’s the right EBIT growth, now that one assumes that margin seems to have settled or stabilized at a level? So those were my three questions. Thank you.
C K Venkataraman
I’ll start answering the first question. Amidst all the consumption pressure, private consumption pressure, that we see all around company results, what is getting covered a lot, if you were to sort of separate the upper middle class, the upper classes and the really affluent versus the middle class and below in that, we see both — if you see sector performances, those of you who may have aggregated sectors and seen, it points to a marked difference in sector performances. Those which are catering to the upper middle class and above, like Titan Company is, performing better than typically mass-market volume kind of sectors.
Why is that? If you look at the long-term trend which is sort of visualized by FY30, the top two income segments are expected to grow from 13% share in, I think, 21% to 26% share in ’26. It’s a secular trend that is reported that will underscore the per capita GDP moving to the $5,500. And, the real concrete stuff relating to that is if you just see calendar ’24, there is a INR75 lakh crore increase in the market cap in the country.
I mean that’s a hell of a lot of crores of — lakhs of crores of market cap which is obviously in the hands of a few crore people. And, of course, FIIs and all that, but certainly a few crore people. The wealth effect of those people is certainly one aspect. And if you look at, for example, the change in the number of income tax payers below INR5 lakhs between 2014 and 2024, it’s about 2 times, whereas the number of income tax payers from INR5 lakh and above, it is 4.2 times.
So clearly — I mean, the inequality rising is one consequence of that. But clearly, from a consumption point of view, these classes of households are in a much better position. And the role of inflation which is substantially, staples, grocery, to some extent rent, maybe, the role of those in their total income is low. So their income is rising very highly. The costs are not rising to that extent and wealth has risen substantially.
Therefore, both ability to spend as well as the mental safety net the wealth effect provides. So these are the reasons why companies like Titan continue to do well. And of course, on top of that, we have another advantage of being a strong jewelry industry company and where the price of gold is another reason for people to — even people with less money to actually convert money into gold. So these are the — long answer but these are the significant factors.
Jay Doshi
Thank you. Sorry, if I may just…
Ajoy Chawla
I’ll just weigh in on the gold. You said gold price and this thing. Currently, there is a fair amount of volatility on gold price. And therefore, during a very volatile period, consumers also kind of become a little cautious. But rather than getting caught in the noise — see, this year quarter one was subdued and we saw the bounce back in quarter two and then there was a Shradh effect, quarter two, quarter three, so a lot of quarter-to-quarter volatility.
My suggestion is look at the last three quarters, consolidated level, and then you will probably get to a more normalized understanding. Similarly, even on studded, look at how Q2 plus Q3 played out, it gives you a better understanding of how things could play out because very high growth rates may not be so easily sustainable, but rolling basis it might be good.
C K Venkataraman
The other thing I forgot to share, Titan is one of few companies which has got an exceptional tech touch aspect with respect to its customers. Our total customer database exceeds 4 crores today. And a very good part of this 4 crore customers are personally known to our staff, they have milestone events in their lives, their purchase history, all that is known through our CRM system.
Therefore, our ability to connect the customer with the right trigger at the right time is really in a benchmark level which many other companies lack. And, therefore, we end up getting that share of wallet a little more easily than others may be able to.
Jay Doshi
Sure. Thank you. And sir, my question on margin?
Ajoy Chawla
Yeah, margin, it is on a standalone basis, what we gave 11% to 11.5%. Consol I have not given.
Jay Doshi
Understood. Thank you.
Operator
Thank you. The next question comes from the line of Amit Sachdeva from UBS Group. Please go ahead.
Amit Sachdeva
Hi, good morning and thank you so much for taking my question. And a good set of numbers in jewelry. My question is, I mean, alluding to also your conjecture on that, there’s a price war of some sort which emerged in gold price. And given that context, I think 28% sales growth and 25% kind of jewelry growth seems very impressive, and so congratulations for that.
But the next question is that, is it — is the market is now in new pricing equilibrium of some sort that you’re comfortable growing in that context? Or incrementally, as the gold price is very volatile, now this frontier of so-called price war can shift into — even to making charges because as the gold price increases somebody can obviously theoretically offer discount on making charges and it triggers another reaction and non-reaction.
So I just want to understand, as we grow at the margin in the marketplace, the link question is that do you feel comfortable with pricing equilibrium that exists between the organized players and regional players which are sort of compete with you? That’s question number one.
Ajoy Chawla
So, a tough one to answer. Our attempt is always to keep that premium between us and competition. It is not just unorganized. Even with organized players, we have a premium over them and it’s a perennial push. I think a lot of that has to do with what we do on the ground, as well as the investments we do in the brand as an air cover. So it’s an ongoing thing.
I don’t think there is anything — Amit, I don’t know whether you can say there’s stability in competitive intensity on pricing. I think it is on an ever-increasing spree and therefore, our efforts are also in that direction to see what we can do between product mix, between better sourcing, between working on minimizing gold laws, [Indecipherable] a lot of execution which kind of helps us stay afloat, including even good strategies on hedging and spot buying versus gold metal loans.
So, there are many variables at play and that’s what helps us to try and keep — so our aim is to try and keep GC stable on a longer-term basis. But competitive intensity, there is nothing like stability, I would say.
C K Venkataraman
Just, I don’t know whether we would term it a price war. A very, very dynamic price situation, yes, and because of multiple types of competitors across the country, the complexity of that, apart from the daily fluctuation, has also risen. And therefore our ability to remain agile, all that has increased — has to increase, even continue to be there. But it’s not a war, because a war would mean you’re actually fighting with somebody every day [Speech Overlap]. We’re fighting with the gold price every day because it is changing every day.
Amit Sachdeva
Sure. No, thanks Venkat for that. So in that sense, can I ask for how the Q4 is evolving so far and studded promotion? And could you comment on that a bit? And…
Ajoy Chawla
So we started very well in the first few weeks of January, first two, three weeks. And then suddenly, after many exciting developments in the international, especially US, has created a lot of excitement on gold price again and dollar. So everything is at lifetime. I think there’s a lot of noise right now, Amit.
It’s actually very difficult to predict how Q4 will go, because the next few weeks, and how much is posturing, how much is real. Then the gold moved from London market to COMEX because of anticipated tariffs. Suddenly there was a gold shortage in the market last one week. And then gold metal loan interest rates are also fluid. Banks themselves don’t know what to do.
So this is a little bit of noise. Difficult to predict how this quarter will go. It started off well, then it kind of hovered somewhere and right now I think a lot of customers are also thinking, let’s see where this gold price stabilizes. But if it doesn’t come down at all, then people may think it’s better to buy right now rather than wait.
So difficult to predict. We hope that we are able to sustain some kind of growth rates that we have seen between — cumulatively between all the quarters put together, or at least quarter two plus quarter three. But, slightly difficult to predict. But longer term, we are more confident.
C K Venkataraman
And, what I would add, Amit, is that what the division has done in the last four, five months, particularly to stay on top of the game in all parts of the business is what has actually also helped in delivering the kind of growth that we got in quarter three. And therefore, from a customer value point of view, as well as a competitive point of view, to the extent we need to compete like that, I think we are in a very good place.
What Ajoy is talking about is completely outside our control, outside anybody’s control, frankly, of external situation, which — and also early days and it’s playing out with so much intensity because it’s just a week, 10 days into that situation. I think in another 10 days, two weeks — a lot of dialogues are going on across the world between various people, I’m sure all that will settle and the intrinsic competitive advantage of the brand and the division, we’ll start extracting the natural value that we deserve.
Amit Sachdeva
Got it. Thanks so much Venkat for this. My second and my last question is basically is a business model question, right? Given so many moving parts are there; studded mix, diamond pricing, customers’ willingness to pay diamond, to gold price volatility and competitiveness, all of it — all forces are sort of coinciding at the same point.
But the question then is that as you look to maximize revenue growth and keeping the margin in a respectable zone, which is now 11% to 11.5%, my question is, would you have some sort of threshold margin that at a business model level, we will not go below, say, 10% and that’s the margin is the lowest for us and we design our economics around that, or is it something that, that threshold doesn’t exist and you will maximize it? How one should think about what could be floor of that strategy and what could be the cap on that strategy?
Ajoy Chawla
Yeah. So okay, I’ll take that one. See, first of all, we don’t look at margin at the quarter level, we look at annualized because of the seasonality shifts, etc. And frankly, in my mind at least, to me, 11% is a little bit of a threshold, that is, going below 11% would not feel right to me, unless it’s very extreme situations what we had during COVID or something totally wild and unpredictable. But, by and large, not going below 11% on an annualized basis is for sure my threshold. I don’t know how much leeway the Board or Venkat will give me.
Amit Sachdeva
Got it. Got it. Fair enough. Thank you so much. That’s very, very helpful.
C K Venkataraman
Thanks, Amit.
Amit Sachdeva
Yeah. Thanks a lot.
Operator
Thank you. [Operator Instructions] The next question comes from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead.
Tejas Shah
Hi, good morning. Thanks for the opportunity. Couple of questions on jewelry. So in our Channel 6, we are seeing that a new competitor is securing good locations near our stores. Now, our store performance in this area is in line with division’s average or weaker? And just wanted to check, Ajoy, on your previous comment that, had we tested removing our gold price premium and wherever we would have done that, does our consumer or customer recruitment actually goes much higher than the average?
Ajoy Chawla
So, I’ll answer the second question first. Yes, whenever we have brought down the premium on our gold prices vis a vis our, let’s say, most relevant competitor in the market, we have seen customer acquisition becomes much easier, takes out one question out of the equation. And we’ve seen that in certain regional markets. We’ve seen that in certain other markets wherever we’ve done that.
And in a way, over a period of time, we have rationalized gold rate markup premiums in the last five years. It has been a sustained year-to-year effort and quarter-to-quarter effort, and we’ve migrated those towards either making charges or product mix.
The first one, wherever a new competitor has come and has opened a store next to us, it’s difficult — there are pluses and minuses, there are gains and losses. What we do is we also have a preemptive strategy, competitive strategy, in which we know when the competitor is opening and therefore, we go out of the way to strengthen our product mix. We do a lot of work on repeat customers, we up the presence and amp up the visibility of the store in that market. And, by and large, we feel that we’ve been able to blunt that.
But there are stores which might be, let’s say, intrinsically needing a bigger location or, let’s say, the operational effectiveness of the store has been a little question mark. In those markets — in that particular store we do see an impact. But by and large, we’ve been able to actually grow well, better than what we would have grown whenever we put in the right investments and proactive approach. That’s been our approach and that’s a separate part of our on-ground competitive strategy.
C K Venkataraman
The other aspect we need to keep in mind is not all the players in the jewelry sector are competitors to Tanishq. There are many in the news, not all are competitors. We know who our competitors are, because the customer conversations, the customer value proposition, all that tell us that. And we keep an eye on them, not an eye on everybody.
Tejas Shah
Got it. And second and last, one source of volatility coming from Trump tariff is also that we picked up from media news item that gold lease can actually get impacted globally. So any early read-through there? I know it’s volatile but any read-through there?
C K Venkataraman
Vijay, [Phonetic] you can answer it.
Unidentified Speaker
Yeah. So one of the things that we’re seeing which is the last one-month phenomena is a slight increase in the gold on lease rates indicated by the banks. But, again, there is also a supply situation that they are also trying to address. So we need to see, therefore, over the next few months how the supply situation of gold plays out. And in that context how these rates finally stabilizes. But definitely, the initial indications are that the gold on lease rates could go up. It’s just that we need to wait for a month or two to understand how the supply and therefore, the pricing will play out.
Ajoy Chawla
And just to add on to that, even if they do play out, we have other levers on hand to kind of manage it between spot. And we are also operating through Gift City and many other levers are there for us to kind of manage that mix between gold on lease and spot. And exchange, of course, continues to be a very strong driver for us.
Tejas Shah
Got it. Clear. And all the best for coming quarters.
Ajoy Chawla
Thank you.
Operator
Thank you. The next question comes from the line of Kunal Vora from BNP Paribas. Please go-ahead.
Kunal Vora
Yeah, thanks for the opportunity. Are you seeing any impact of the LGD stores which are coming up? I know at national level there will not be any impact but like in specific locations, example, Borivali, I see that there are eight, 10 stores LGD selling within like a kilometer from Tanishq and CaratLane. So are you seeing any impact on those stores in terms of studded business of Tanishq or on the sales of CaratLane?
Ajoy Chawla
See, one way for — the way I look at it is I see it as a portfolio play between Tanishq, CaratLane, Mia and the rest of the market. And as far as we are concerned, we are seeing fairly good buyer growth continue in studded in the sub-100,000 segment, which is where most of the LGD players are playing. So as of now, we have not yet seen that impact.
But in specific markets like Borivali, I am not able to answer right now whether in Borivali market we are seeing some impact, because I’ll have to see a portfolio play for Borivali market for all our brands, because we’ve also expanded with a multiple portfolio play. But so far, even the spot checks that we do at Mia stores, CaratLane stores and Tanishq stores, customers at least have not come and said why are you not keeping LGD? Many of them continue to say, I hope your diamonds are all natural.
And by any chance do you have LGD or it is only natural. That’s more clarificatory questions that we are getting. But you’re right, we can’t be sure how these things play out. So thanks for sharing this sharper question. We will — I will identify certain markets and keep a close track on it.
Kunal Vora
Thanks. And second quick one on the new income tax changes, there will be higher disposable income and it also looks like more people will be willing to disclose slightly higher income. Maybe instead of INR7 lakhs, INR8 lakhs, INR12 lakhs. Do you see this benefiting the organized jewelers? Do you think showing PAN card has been an issue for certain customers?
C K Venkataraman
I think it will benefit the whole consumption sector, not just the jewelry sector. Of course, we will get our due share of that. It is certainly a welcome move from multiple angles, and I am sure our confidence in the FY26 growth got another additional boost four days back.
Ajoy Chawla
And PAN card [Foreign Speech] who don’t want to show PAN card are really the very, very rich. I’m not sure how this plays out but I hope what Venkat said is benefiting us.
Kunal Vora
Understood. Like, many would not be having much of reported income. So at least the reporting level also could go up from the business class.
C K Venkataraman
They are betting on that. But given that INR1 lakh crore becoming INR2 lakh crore in total because the multiplier and all should flow — the due share should flow to us also.
Ajoy Chawla
Yeah.
Kunal Vora
Understood. That’s it for me. Thank you.
Operator
Thank you. The next question comes from the line of Harit Kapoor from Investec. Please go ahead.
Harit Kapoor
Yeah, hi, good morning. So just have two quick ones. One was on — so if you look at all your format performances this quarter, so it’s probably the first quarter in seven, eight quarters where everything in terms of sales, value, growth has been in double digit, and even the seven, eight quarters back had a lowish kind of COVID base.
Apart from your internal initiatives that you’ve articulated on this call, I mean, do you believe that the segment price points that you’re operating at in jewelry and even some of the mid premium etc. on analog watches, there is — demand trends have, I won’t say, inelastic but they have been significantly more stable and likely to continue to be so as compared to a lot of other consumption spaces because this dichotomy of double-digit growth across your formats is something that you’re not seeing in most of the consumption spaces.
C K Venkataraman
Yeah, very much so. So the one big thing is these segments are sort of immune to the inflation, low wage growth, maybe even job losses and all that. And that’s in our favor. That’s the first. The second is, in multiple categories, we have low market share and the formalization, acceleration is to our advantage, which many other companies across sectors may not have.
The third is, overall, our strategy, as well as execution, has improved, particularly in some of the new businesses. And you saw Ambuj’s clarification about Taneira that what is reported actually hides a rather better picture on the ground in terms of offtake. And even internationally, I mean, we didn’t speak at all, there was no question, but if you look at the international growth, it’s exceptional in GCC and North America. So, I think it’s a combination of segments which are in our favor and they’re growing in income as well as in numbers. The market share opportunity continues to be strong for virtually all our categories.
The assets on the ground, because we are a unique company with more than our — 90% of our sale or 95% of our sale is EBO. That’s a very rare situation, very strong brands, very strong partners. We have 1,000 partners across the length and breadth of the country, no company can boast of 1,000 people with fire in their belly as well as in their hearts, and actually driving the performance of the company in every outpost. Now that is — you can’t even gauge the power of that. Right? And, of course, the touch tech thing that I spoke of, the customer relationship, knowledge. Therefore, certainly we see a long runway on this thing.
Harit Kapoor
Got it. Right, sir. And the second thing was in CaratLane. On last two quarters, on a Y-o-Y basis, the margin expansion has been very strong. Would you attribute this largely to strong same-store sales growth — strong like-to-like growth which has come back which is guiding operating leverage or what are the other factors kind of playing through this?
C K Venkataraman
Yeah, Saumen, you can answer.
Saumen Bhaumik
Yeah. Hi. Last two quarters, I think, we tried a lot more on the side of sales growth and there were very many things that we did in the space of product, newness, as well as some tweak in the way we reach out to customers, I’m talking about the marketing media mix, multiple experiments that we have done. All that has worked in our favor when it comes to the revenue.
On the other hand, we also kind of looked at productivity and we kind of managed our multiple elements of cost quite well. I think these are the two things that I would say are the key factors that has expanded our overall performance in terms of profitability, profit margin and so on and so forth.
Harit Kapoor
Great, thank you. Thank you very much.
Operator
Thank you. The next question comes from the line of Vivek Maheshwari from Jefferies. Please go ahead.
Vivek Maheshwari
Hi, good morning, sir. Just one question. When — you mentioned about diamond prices being stable, but when we talk to industry players, my understanding, and correct me if I’m wrong, but through the course of the last year second half of this quarter, the diamond prices actually continued to slide down. Is that understanding not correct?
Ajoy Chawla
I think the players you’re speaking to are talking about wholesale prices in dollars, and largely for the US market, and big stones. Mostly they are all big stones. So when it comes to small stones, which is by the way the bulk of our studded jewelry, there is a very different outlook and reality. The other piece here is, as far as we are concerned, any efficiencies in buying at reasonable prices etc. helps us. But from a retail price point of view for what we are selling to the market, it has been stable.
So, a lot of that, that gets covered in narratives and by diamond players and many of the things they’re talking about, they’re really talking about their selling prices of the rough and — or sorry, their buying prices of rough and their selling prices of big stones at wholesale level for international and domestic markets. And the things they quote, Rapaport, RapNet, etc., frankly, the reality is at the price you buy from them versus — and the price you sell in the market. So, it is from that context I was saying, as far as we are concerned, we are seeing fairly stable prices in diamonds.
Vivek Maheshwari
Got it. And just a follow-up. So when you talk about in the last few years you have taken efforts to, let’s say, bring some level of parity with the — on the gold side, in case of diamond is there a micro market need to also look at, because there aren’t that many players in the market on the diamond side. So how do you ensure that you are competitive or given that you are like — you face very little competition, you in a way determine the price of the jewelry — the studded jewelry?
Ajoy Chawla
No, nothing like we determine the price. Market is full of players and there are enough players today in the market, new age as well as existing traditional players who are doing strong work on studded. All I would say is I think our focus has been on continuing to build brand desire for Tanishq diamonds and newness of designs and all the many things that Venkat spoke about just in the preceding answer. So, really, it’s a question of maintaining an edge on product and brand superiority and customer experience that really helps us.
Vivek Maheshwari
Got it. And last bit on this one only. So sir, is the — so, let’s say, particular piece of studded jewelry, will it — the price will be the same across the country or it can change based on the micro market and the competition in that market?
Ajoy Chawla
No, no. It’s the same across the country.
Vivek Maheshwari
Got it. Thank you. All the best.
Operator
Thank you. Ladies and gentlemen, due to time constraint, we take that as the last question and we conclude the question-and-answer session. I now hand the conference over to Mr. Ajoy Chawla, CEO of Jewelry for his closing comments.
Ajoy Chawla
Yeah. On behalf of Venkat who had to step out for an urgent call, I would like to thank all of you for all the challenging and exciting questions that you all keep asking us till we see you next time. Bye.
Operator
[Operator Closing Remarks]