Titan Company Ltd (NSE: TITAN) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Ajoy Chawla — Managing Director
Ashok Sonthalia — Chief Financial Officer
Arun Narayan — Chief Executive Officer- Jewellery
N S Raghavan — Chief Executive Officer- Eyecare
Saumen Bhaumik — Managing Director at Caratlane
Analysts:
Videesha Sheth — Analyst
Manoj Menon — Analyst
Arnab Mitra — Analyst
Sheela Rathi — Analyst
Devanshu Bansal — Analyst
Siddhant Dand — Analyst
Jignanshu Gor — Analyst
Harit Kapoor — Analyst
Amit Sachdeva — Analyst
Mihir Shah — Analyst
Jay Doshi — Analyst
Vivek Maheshwari — Analyst
Presentation:
operator
Ladies and gentlemen, good morning and welcome to the Titan Co. Ltd. Q3FY26 earnings conference call. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Ajoy Chawla, Managing Director, Titan Co. Ltd. Managing thank you. And over to you Mr. Chawla.
Ajoy Chawla — Managing Director
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 to have seen this kind of uptick in demand and I must also say it is coming on the back of lot of volatility, competitive intensity and I must compliment 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 and A.
Ashok Sonthalia — Chief Financial Officer
Thanks Ajoy and very good morning to all of you. Thank you for joining this call. I just thought this time that 34 important points related to quarter or going forward. I will just point out so that you may please take a note. We are very happy to announce that we completed 67% stake acquisition of the MAS and accounting of that you will see from the 1st of January consolidation of the MAS books into Titan. Consolidation will start from the 1st of January. So quarter four results you will have the MAS consolidation with Carrot Lane International business which is primarily jewelry business, steel and now the mass 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 statutory reporting and the business view 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 sale through a note in our IR present as well as 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 three books. The impact on a consolidated level is rupees 152 crores which has been shown an exceptional item in the consolidated as well as 138 crore in standalone financials.
So these were some of the important points which I thought I’ll point out to them. Now we can open the floor for question and answers. Thank you.
Questions and Answers:
operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Vidisha Sheth from Ambit Capital. Please go ahead.
Videesha Sheth
Hi Mani. So my first question was if you can briefly touch upon the growth trends that you’ve seen in fourth quarter till date especially in context of further sequential growth size inflation.
Ajoy Chawla
This is addressed to any particular division or overall.
Videesha Sheth
I’m sorry, I meant from the jewelry cycling perspective.
Ajoy Chawla
Arun will ask.
Arun Narayan
Okay. Good morning, this is Arun Narayan, CEO Jewelry. Thank you for your question. So the fourth quarter we’ve just seen a month gone by and I like to leave it by saying it’s been a good month. The real difference what we have seen in January versus the months 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 bi directional movement of gold rates. 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.
Videesha Sheth
Okay, just a follow up to this Arun. So the gold gold exchange campaigns 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?
Arun Narayan
Yes, it’s sustained and our own investment and efforts behind that call out also sustains.
Videesha Sheth
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 winding up of operations of small contract manufacturers or even mom and pop retailers which could ideally benefit the overall organized industry?
Arun Narayan
Nothing, nothing. Nothing to really call out as something, something new which we are seeing of course formalization continues, but beyond that, nothing. Nothing to call out.
Videesha Sheth
I’ve got few more questions but I’ll get back to you. Thank you.
operator
Thank you. We take the next question from the line of Manoj Menon from ICICI Securities. Please go ahead.
Manoj Menon
Hi team. Great performance. My questions are actually slightly beyond the quarter or the short term look. I think this sort of unprecedented gold move which I’ve seen the previous participants spoke about possibly hypothesis of normalization. But my question is more inward looking. You know, when these sort of, let’s say material, let’s say beyond the demand planning changes which actually happened, you know, particularly to the supply chain road price etc. If you could talk about let’s say any behavior in consumer, for example, we would have discussed between the two parade to 18 and possibly 114 earlier.
But there are practical challenges for consumers to buy anything beyond 18 on the lower side because as I understand it can be pledged etc. Or from a supply chain point of view, let’s say you manufactured a 10 gram chain which had a certain lead time and a certain, let’s say time for lifting in the store, etc. Then suddenly the price is like materially higher. Could you talk a little bit about how nimble you actually handled these in the last six months, let’s say and which is a competitive advantage. Thank you.
Arun Narayan
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 karat 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 seething the thought.
And similarly with studded jewelry at lower Caritages we always had 14 carat jewelry in both carat lane in MIA, but now we’ve also introduced that in Tanishq and also up to 9 carat in carat lane 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 carrotages, there is a bit of complexity and there is a bit of transition that the system undergoes which is what we have 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 ushering in.
Ajoy Chawla
Manoj, I’ll come in on your supply chain piece. It is not that lead times dramatically change or complicate life, it is simply the changeover and ensuring that you are 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 etc. To a large extent. So that doesn’t really impact us the concerns you might have had in terms of either lead time or volatility in price etc. Because it’s mostly our gold.
Manoj Menon
Thank you. Thank you Arun and Ajay. We just want to follow up on the first one is that the making charges in India is a percentage of the gold price. Now what I broadly observe from most of the branded players who advertise listed unlisted, both put together, it’s an X percentage discount on the making charge. Is that now through the year sort of phenomena given that the gold prices are higher because from a tonnage point of view at least I observed that you had pockets or seasons or windows in which you used to have it.
Will that be necessity now to have these through the year?
Arun Narayan
What would we need to have?
Manoj Menon
No, no discount on making charges given that the it’s a percentage and it would have gone up 70, 80 in line with gold inflation. Historically observation is that Sanish Taxi had those discount windows, you know, but, but given the gold prices where it is, would you either have to relook at the percentage or have an all year sort of a discount or maybe you are able to manage it, you know better as well.
Arun Narayan
So far I think we’ve been able to manage it across both the gold as well as the studded portfolio. And we have windows Pre Akshay Trithiya and Pre Dhanteras where it’s across the board and rest of the year it’s on certain, on certain grammar 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’re alluding to.
Manoj Menon
Excellent. Thank you. Thank you so much. And the fallback in the queue. Just a second if I may come one because one comment beyond the L1, L2, L3, the franchise model which Tanishq had over a long period of time, are you looking at any other franchising models at this point is already there in the market?
Arun Narayan
Well, we keep exploring various models but nothing really to significantly alter the franchising model that we currently have.
Manoj Menon
Okay. No 44 model for now actually.
Ajoy Chawla
Not really sure.
Manoj Menon
Thank you and all the best.
operator
Thank you. We take the next question from the line of arnav Mitra from Goldman Sachs. Please go ahead.
Arnab Mitra
And congratulations on a great quarter. My first question was on buyer growth where you mentioned buyer growth is flattish this quarter but there’s also mention of 45% new buyer contribution, something that I think was not mentioned last couple of quarters. Are you seeing any improvement in that metric? And how does the square off between not having buyer growth but 45% new buyer contribution? Does it mean that your existing mixer loyalty members that’s where the frequency reduction has happened.
Arun Narayan
Yeah, thanks. Thanks for that question. The new buyer share is more or less stayed consistent and or 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. Store initiatives which happen at a store level as well as CRM centrally as part of our encircle program and now also with Tata New. So yeah, 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 are blessed to be in a category where despite such significant increases in raw material cost we are still able to kind of hold a certain buyer, you know 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.
Ajoy Chawla
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.
Arnab Mitra
Got it. And one follow on question on this was is there any different trend in studied biogrowth in terms of that trending better than overall biogrowth?
Arun Narayan
Yes, it is a few percentage points better and has been also the case last many quarters.
Arnab Mitra
Got it. My second Question actually was on jewelry margins. So given what’s happened with gold and the mix, which you cannot really control, I mean, if consumers want more gold coins, do you beyond the 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 Ashok could highlight any one offs in terms of inventory hedging gains or losses that were there.
Ashok Sonthalia
Hi. 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 margin remains an outcome. So in the way we keep prioritizing growth, customer acquisition, market share, etc. But at the same time we have always said that we are very mindful of margin. So you are right. The EBIT profit growth in absolute amount is becoming more and more important than profitability margin because profitability margin increasingly is becoming challenging in the rising gold environment. So that’s what, what was your second part of the question?
Arnab Mitra
Were there any one offs in terms of hedging gains or losses in the.
Ashok Sonthalia
No. In quarter three? There is no one off. Last year quarter three custom duty gain was there, which you remember if we normalize then 50 basis point drop is there in quarter three compared to last quarter.
Arnab Mitra
Got it? Yeah. Okay, thanks. Thanks. That’s it.
operator
We take the next question from the line of Sheila Rati from Morgan Stanley. Please go ahead.
Sheela Rathi
Yeah, thanks for taking my question again. My question is respect to the jewelry business. You know, you referred to that. You know, buyer growth has been flat and at the same time when we look at the studded growth, it has been lower than the jewelry business growth. So how should we think about the transaction value of customer? I mean logically, buyer growth is slow. It would mean that new buyer growth is slow. We would believe that, you know, the transaction values are going up. Of course there is a gold price increase also, but if studied, it’s lower.
How is actually the consumer behaving? Because this was a quarter which was a high wedding calendar quarter also. So our new consumers who are buying for weddings not coming to Tanish or is there some real change in how consumer is behaving?
Arun Narayan
Okay, I’ll just set the record right on this. Our buyer growth on studded has been a few percentage points higher quarter on quarter. Not only this quarter but also many quarters leading to quarter three. 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 a ticket size, a bigger ticket size jump in gold versus diamonds. And that’s why the buyer growth translating into revenue is much higher in gold compared to studded jewelry.
That being said, it is also true that we are seeing a greater traction at higher 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 rise versus others who may be waiting and seeing if gold rates kind of cool down. In general, wedding buyers are the ones who where it is not discretionary and they are the ones who therefore needed to give a lot of comfort from an exchange standpoint.
And we are seeing wedding buyers stay obviously invested as a consequence.
Sheela Rathi
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, a studded jewelry customer and you know, a gold jewelry customer?
Ajoy Chawla
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 three, while plain gold ticket size went up by 44% or something like that. So there is a differential in the ticket size growth in both of them.
Sheela Rathi
I’ve seen ticket size 1.9 lakhs and a new customer. What is the reduction?
Ajoy Chawla
I’m sorry, we won’t be able to give that level of depth because it may not.
Sheela Rathi
Understood. And this 1.9 lakhs would be the highest we have seen ever.
Ajoy Chawla
That’s true. Yeah. Yes, yes.
Sheela Rathi
Understood. Thank you very much.
operator
Thank you. We take the next question from the line of Devanshu Bansal from MK Global. Please go ahead.
Devanshu Bansal
Hi sir. Good morning. Congratulations on a good performance. So first question is on jewelry gross margin. The comparable gross margin so that we report in our standalone 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 am sort of checking on this because we have not seen such kind of gross margin dip in previous quarters. I wanted to check the nature of these growth investments that we are making in the business. What happens if sort of both growth profile of the business takes a dip? Are these sort of investments reversible in nature or we may see some margin challenge if growth doesn’t show up.
Ashok Sonthalia
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 standalone numbers reflect jewelry number. But the drop in GC is he is doing normalized so 1%. Okay, so normalized. Yeah, you are right. 1% drop. And we have been talking about that it’s and rising gold prices. There are two three ways margin gets impacted. One is of course gold coin salience has gone up quite a bit. Studded jewelry margin because of the gold content goes up in terms of value.
The studded jewelry margin also goes down while gold jewelry remains the way they are and this put together I think. And you also need to check whether you are including Boolean in your calculation. So please exclude Boolean which has been given that.
Devanshu Bansal
So then Q3 last year there was no bullion reported by you and this year it’s very small about.
Ashok Sonthalia
I just wanted to check that you are doing the thing. You might have done that right. 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 karat 18 karat 9 carat light jewelry they would eventually catch up when gold prices stabilize. In the continuously rising gold prices jewelry margin 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 have been growing nicely recently.
But yeah, not in the same percentage as revenue and business mix is another thing. When you look at the company level, TCL level then the business mix also plays a role. Jewelry is becoming quarter three particularly it has become more dominant because of 40% growth while other business businesses have grew nicely. But they are 17, 18%, 14%, 15%. So because of 40% now jewelry which is slightly lower margin business has gone up in the portfolio mix and that also has suppressed TCL India or TCL consolidated margin a little bit.
Devanshu Bansal
Okay, understood, understood. And sir, we I also wanted to understand there’s a good component of sales coming from gold exchange and some of the installment schemes that we have which is relatively immune to the gold price. So wanted to check what is the mix of these two currently for our business and maybe what we are targeting for the upcoming year through gold exchange and the installment schemes.
Arun Narayan
Yeah, so I’ll answer that. The jewelry purchase plan we started with Golden Harvest many years back, but over the last almost two years, the program that’s 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 products 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 times.
That being said, even the sale through the gold exchange programs have gone up. Both the Tanishq exchange program where people come back to upgrade their Tanishq jewelry as well as those who bring back gold bought elsewhere. 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 three, we saw a good jump in that. Yeah, you can.
Devanshu Bansal
So broadly can we understand that 70, 75% of your business is relatively immune to voltage volatility. Is this a right inference?
Arun Narayan
There will be a, you know, like a double accounting between these two because there are those who also, you know, there is a intersection B as well. So I don’t have a figure right now to give you, but our idea is to, to move in that direction that, you know, in the direction that you’re 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 two as well.
Ashok Sonthalia
And just to add one clarification that in gold exchange program upsell also happens. So you know, to that extent the upsell element is having impact of gold price, but customer is taking it in stride. So all these intersections are there. So deriving 75% is not right.
Ajoy Chawla
Yeah, I think I would just add a comment here. I think nobody can be immune from gold price increase. Even if you may be exchanging 100% or you may be having a Reva Golden Advantage plan. There are enough people who may change their mind when they see gold prices are gone up substantially or 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 the.
Devanshu Bansal
Last small question from my end. So IVR growth is 11% with ASP contributing about 5, 6% of that. So the volume growth is still low. At 5, 6%. Right. So I’m talking about the customer level sales in iVare business. Two questions here. One, we were working on the mass and mid premium end of the market. Right. As indicated in the analyst meet. So what has driven this ASP increase? And the subpart to it is as in when do we expect the volume growth to pick up in this business?
N S Raghavan
Hi, good morning, this is Raghavan here. Thanks for your question. See as far as Q3 is concerned, our domestic growth was almost 17.5%. That was the overall growth. And in terms of volume, the volume growth was around close to 9%.
Devanshu Bansal
But the way referring to the UCP sales, right. So that is reported in the PPT.
N S Raghavan
The UCP sale is 11%. You are absolutely right. So the omnichannel sale, what we have reported is 11%. That’s a revenue growth. And this revenue growth has been reported by a volume growth of close to around 8%. So from a volume growth standpoint it is more or less within our zone. This is what we had estimated around an 8 to 10% growth. So this is what we will continue to deliver. So that is what it is.
N S Raghavan
Any shift in focus that we had indicated earlier we were targeting value and mid premium. So what is lead to this ASP increase?
N S Raghavan
Yeah, so in terms of positioning, right. I mean Titan Ifils 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, so quarter three has also been aided by a ticket size increase because normally November and December we see an NRH 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.
Devanshu Bansal
Fair enough. Thank you for taking it. Thank you.
operator
Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to two questions per participant and rejoin the question queue. We take the next question from the line of Siddhan Dunn from Goodwill. Please go ahead.
Siddhant Dand
Yeah, hi. Excellent set of numbers. I just wanted to ask which geographies have contributed to the international profits and are there still new stores that are unprofitable and what would be the average margin in the mature stores?
Ashok Sonthalia
So Siddhant, I will give you one color. That international margin had at least one time this time this quarter because we had some primary sales of 200 crore close to that. And that has, if you adjust that the margins are about 5 to 6%. And then gradually it is growing up as we have always talked about from the loss to gradually it will improve to reflect jewelry margin which we have in India. But at this point of time 5, 6%. We of course all stores because of the high more complex product and studded jewelry ratio being high in North America, but operating cost also being high, more or less margin profile remains same as you see in India.
So there is nothing significantly different in international market.
Siddhant Dand
Okay, could you just elaborate on the exceptional item?
Ashok Sonthalia
Okay, so we had, you know, 194 crore of primary sale by our Dubai to Damas for some of these two stores which we are getting Tanesh converted into Tanesh. And because Damas consolidation is starting from the 1st of January until that it was not. So that is kind of sale of our Dubai region where this additional product profit is sitting. But from the 1st of January onwards when Damas starts getting consolidated, then these kind of transaction will get eliminated. But before the 1st of January because this these transactions happen, they could not be eliminated.
Siddhant Dand
Understood? Understood. Any update on what percentage of stores will be converted to Damask or what percentage of revenue will be converted. Sorry. Will be converted to Tanish from the mosque?
Ashok Sonthalia
No, there is nothing like that. The mask 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 Tanis kind of offering. And some of those stores are getting converted. You will see some of the quarter four also and we will report that as when we present quarter four result. So some more stores will get converted apart from these two. But it is store by store assessment and we don’t have the final number.
But it is not a very, very major activity. So you know, Damas will keep growing its network on the Arab side of the segment.
Siddhant Dand
Yeah, okay, that’s great. My second question was regarding the steel margins. There was some exceptional seasonality that you mentioned. There’s a broad range of what kind of margins could we expect that business to have. You know, just a conservative number.
Ashok Sonthalia
EL is a project business where we do percentage of completion method on a part of business which is automated 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 two. And Teal is still not that scaled up entity. You can see these margin variations. But I can only tell you Teal is doing well, with a good order book and good visibility for the future.
But quarterly margin ups and downs you might expect in future also.
Siddhant Dand
Okay, that’s great. I’ll join back for a couple more questions.
operator
Thank you. We take the next question from the line of Dignanshu Gore from Bernstein Research. Please go ahead.
Jignanshu Gor
Hi, good morning. Thank you for the opportunity and good numbers. I wanted to check on the jewellery business. We have of course seem to have ramped up our activity marketing efforts, both discounting, gold schemes, etc. And 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, if this gold price stability does not happen during the year, would you want to revise how you approach the problem you’re solving? Is it a margin profile, is it rosy, 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 here?
Ajoy Chawla
Hi Jiganshu, 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 of par for the course for most festive season and other occasions. And it’s been there. In fact our discounts have been slightly lower if you ask me, than more. In fact, our entire approach has been to create excitement in the customers on two counts. One is by freshness of products and product innovation and campaigns which kind of appeal to them and show people 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 two fundamental shifts that have happened and therefore to that extent will the, you know, is discounting or something that is driven down gross margins or something like that? No, that’s not the honest answer is it’s business mix as Ashok shared, 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 costs, cost, relative weightage of gold and diamonds in the material cost.
And thirdly, it is to do with gold coins in a period like this of rising gold prices as well as festive quarter where the product mix within jewelry also undergoes some change. So frankly these are the only pieces now whether 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 and absolute overall growth. That might be more relevant. Once gold prices stabilizes, maybe we can come to some understanding of where it settles down.
Jignanshu Gor
Okay, that’s helpful uJoy, thank you. Second question was on Caraclean. So we saw a significant margin uptick here but there is no specific mention of any base effect here for customs duties or anything. So just wanted a bit of color on how to look at the Carat lane margin performance. Especially as you rightly said with studded sort of also going down little given gold price. So what has really led to it and how should we think about it in the future?
Ajoy Chawla
Ashok will respond to this.
Ashok Sonthalia
So Carrot Lane has a high proportion of student and that is where the last quarter there was some impact of custom duty but it was not so significant like Tanesk or Titan jewelry business that we needed to call out. But there was some element of that for sure. As you are aware that there has been operating leverage at play in Carat Lane which is available from the financials of Carat Lane. The studded proportion has slightly come down because they also introduce 9 carat 14 karat Modern gold jewelry which is getting good traction and particularly in the online space and gifting space etc.
So I expect that overall margin we had, if you remember couple of quarters back we had said that gradually Carrot Lane with scale will start inching towards double digit EBIT margin and I think they have reached there may be a slightly earlier than what we expected but I think they would stay there. Low double digit margin EBIT profile. That is I would say I think if Somin is on the call, he wants to add anything. Are you on the call?
Saumen Bhaumik
Yes, I am. Can you hear me?
Ashok Sonthalia
Yeah, yeah we can hear you. You can add if you want to. If I have missed.
Saumen Bhaumik
Yeah, sure. No, I think you pretty much covered everything. I think our studded ratio is anywhere. Between 85 to 90%. We have been hit by the escalating gold rate in quarter one quite badly. I think we recovered a bit better. In quarter two and quarter three. 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 six quarters.
If you look at our figures I think so revenue growth and cost management are the two main factors and recovery from the from the margin drop that happened in Q1 are the three things. That I would attribute Q3’s you know. The profit, performance and introduction of nine carat diamond jewelry, Shia diamond, which is silver and diamond combination. They are low in terms of contribution. Today, but they have a positive impact. When it comes to margin.
Jignanshu Gor
Okay, that’s very helpful. Just a clarification on this. So studied growth in volume terms is broadly same is Australia share in volume terms or other is broadly same as last year. Is that a fair. Point?
Ajoy Chawla
I think, I think we’ll let that be. We’ll give you more details in the investor day. Shaman will share a little bit during the investor day.
Saumen Bhaumik
Yeah
Jignanshu Gor
sure. All right, thank you.
operator
Thank you. We take the next question from the line of Harith Kapoor from Investec. Please go ahead.
Harit Kapoor
Yeah, good morning. So just two questions to mind. The first one was, you know, on domestic jewelry, so over the last six months, last two quarters specifically, have you been kind of positively surprised with the level of gross contribution you’ve been able to hold as well as, you know, the relative inelasticity, if I can call it that, on the grammages, while they obviously would have declined. But has both these elements kind of positively surprised you? And in that context, your comment on kind of consumer behavior and expected going forward also would be helpful. That’s my first question.
Ajoy Chawla
I won’t answer the gross contribution. This is Ajoy here. 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 there was a lot of people on the fence, If I go back to quarter one and quarter two, waiting for gold prices 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 it will continue to go up. And then the festive season came, followed by the wedding season.
A lot of customers really jumped in on account of this entire FOMO fear of missing out. And I feel that is continuing even now. You know, it remains now, of course, with the volatility in gold price, 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 hold. The second piece, I think is more internal to us. I think our teams have gone out on a limb and done extensive work on product, on retail, on customer outreach, on exchange.
And I think it speaks volumes for the exchange for the execution that has really played up. So I think somewhere some credit also goes to the teams for having done that on gross contribution. I’ll leave it for Ashok to answer.
Ashok Sonthalia
Harith, I don’t think we specifically and separately disclose 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 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 1st time we saw a really huge volatility and correction but again it has started going up and what we are told by people like UN economists that structural things underlying gold bullishness space.
So you know one can expect that gold prices might continue to go up and in that environment there will be stress on margin. Some part we will able to mitigate through operating leverage. As long as we are able to deliver good revenue growth, we will get operating leverage and we’ll able to maintain EBIT level or PBT level margin profile.
Harit Kapoor
Great. And the second, and the second question was on this, on you know earlier participants have asked about formalization but my question is from the perspective of in an environment where you know, the cost of doing business as far as inventory is concerned dramatically goes up, you know, and, and, and the entire market doesn’t have a balance sheet that you do, do you expect pace of expansion in the industry to kind of, you know, relatively slow down? Not for you but generally to slow down given this the inventory cost is so high and it’s primarily a cocoa model X your business.
So just some thoughts on that.
Ajoy Chawla
It’s difficult to comment on how the industry will behave. You know, 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.
Ashok Sonthalia
Certainly it puts us I would say a bit competitive. Not huge, but it’s an advantage, competitive advantage for us because we are able to at least fund our inventory I think better than others.
Harit Kapoor
Great. Wish you all the best. Thank you.
Ajoy Chawla
Thank you.
operator
Thank you. We take the next question from the line of Amit Sachdeva from UBS Group. Please go ahead.
Amit Sachdeva
Hello, good morning. Thank you for taking my questions and congratulations on great set of numbers. So my question is on the studded data and just wanted your comment on how the consumer behavior in this segment is shaping up now that you own both the narratives of LGB which is on one side of consumer value proposition and Kanesh diamonds on the other. But I also know that higher value is going faster. But you know 1 to 2 lakh was bit under pressure. But you also launched lots of things in some 1 lakh segment. So just wanted your kind of, you know, input here how this business consumer behavior is shaping up and also the student promotion in that context, how it is responding to some of the initiatives on price points that you had taken.
So some color that would be very helpful.
Arun Narayan
Sure. Thanks Amit. 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 rates behaving the way they are also in gold jewelry above 1 lakh is a different picture for studded jewelry. And a lot of effort 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 dailywear studded portfolio with Ananya Pandey etc.
Are all efforts we are doing too boo that customer back into the store. So having said continues to be high on our priority. I don’t think, I mean it will take lots more effort for us to do that. So I will only leave it by saying that, you know, let’s say the trends that we are seeing in a sense maybe the slowdown in less than 1 lakh may be platooing a bit. We’re not seeing an acceleration there and even in January we are seeing some early signs of results from the efforts we are putting in.
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.
Ajoy Chawla
So I have one additional comment to add here. As a portfolio of brand between Danish which has a substantial contribution of buyers in the sub 1 lakh, sub 50,000 MIA carat lane 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 studied space in the sub 100,000. In fact the stress on gold in the sub 100,000 buyers is far higher than, you know, studied.
So which is fine, we understand and there’ll be different solutions for us.
Siddhant Dand
Yeah, got it. That’s very helpful. You know Ajoy and Arun, so just a small one here is that obviously last year we’ve seen studded being in mid teens and then last quarter was a bit better. In this promotion cycle, are we seeing the similar growth in studded as the last quarter or acceleration or some sort of from a trend point of view, what so far we’ve seen in January, is there a comment that you would make?
Arun Narayan
It’s too early to call. So early to call that, Amit. Having said that, I would say that quarter three has been better than the period prior to that. But quarter four will allow us to wait and call it out at an appropriate time. It’s perhaps a little too early. Also our festival of Diamonds is a longish campaign so we’ll have to wait and see how that plays out.
Amit Sachdeva
Got it. Thanks so much. That’s all for me. Congratulations once again on great set of numbers. Thanks.
Arun Narayan
Thank you.
operator
Thank you. We take the next question from the line of Mihil Shah from Nomola. Please go ahead.
Mihir Shah
Hi sir. Thank you for taking my question. So 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 saliency for you. So does wedding and festive quarter have a material difference? In this 1.9 can be material different for the remaining 3 quarters. Just for clarification, that was.
Arun Narayan
Yeah, so I mean there are two forces so to say one is consumer mix and the need state mix and second is the gold rate increase. So what we are seeing in quarter three, we are seeing play out in quarter four as well. Well, because it is also a wedding quarter and we have seen gold rates increase significantly even beyond December into January. So yeah, so we are seeing quarter four begin to behave similar to quarter three.
Ajoy Chawla
I’ll just add one more flavor for this. Typically during Akshay, Trithiya and Danteras there are a lot more people who come in. Many new buyers also come in because they buy small tickets, they buy coins, they buy all kinds of. So actually during Those periods of 15 days you normally land up seeing a slightly lower ticket size. But it’s as Arun said, during wedding purchases etc. You see higher ticket size and during festival of diamonds or diamond activation you see higher ticket size.
Mihir Shah
So assuming these swings across quarters may not be as material is predominantly the understanding, right?
Arun Narayan
That’s correct. Yeah. Right.
Mihir Shah
Secondly, despite.
operator
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. Please go ahead.
Jay Doshi
Yeah. Hi. Thanks for the opportunity and congratulations on great execution. The question Is in the past, you. Know, you’ve indicated that passing on making charges to consumers in a rising gold price environment, you know, is gradual over a couple of quarters and so, you know, invariably saw some dip in margins. When I look at this quarter’s performance on a y o y basis despite all the margin headwinds, beat mix or you know, in a volatile environment, your EBIT growth is exceptionally good and strong. So you know, my question is were you, are you positively surprised by the acceptance of, you know, making charge, you know, as a percentage of sales, you know, this in this upcycle of gold price or this is kind of behaviors that you would have expected in any case at the beginning of the quarter.
Ajoy Chawla
Hi Jay, this is Ajar here. I’ll take that question. What we have seen. So I think there are two, three things at play. Firstly, there is a slight shift in the repeat and new buyer contribution. If you see new buyer contribution compared to year on year is 3 percentage points down and typically they come in at lower ticket size whereas repeat buyers compared at higher ticket size. Secondly, because of wedding and the repeat buyers being high, you typically find a richer product mix that we are able to sell compared to new and let’s say non wedding.
The third angle I would like to say which goes in the opposite 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 to slightly medium sized, medium complexity products. So these are two forward and one backward. And there’s one more forward which has helped us a lot in quarter three is the collection that we launched was phenomenally successful. It so happens to be. We did exceptionally well with the Mriganka collection and the campaign which the team put out that created desire, what I would call as irrational desire.
So I think all these three, four factors combined have seen the outcome that you’re seeing. And the final point I would say which is not related to gold but to do with studded. 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 four 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.
Jay Doshi
Thanks. Great execution and wish you the very best.
operator
Thank you. We take the next question from the line of Vivek From Jeffries. Please go ahead.
Vivek Maheshwari
Hi, good morning sir. Couple of questions on this gold price. One is, you know, not very long that there was this concern that not concern but there was this debate whether, you know, the younger generation prefers gold as much whether as investment class or as consumption category. Do you think that the way in which prices have gone up, so much excitement around ETFs and I’m sure you would have seen gold ETF data yesterday. Do you think that that alters this behavior and the next generation will be far more geared towards gold versus what it could have been otherwise?
Arun Narayan
No. Looking at the performance of Carat Lane 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 adornment more. And whatever we are doing on, you know, to keep products exciting in terms of new collections across all our brands is also kind of keeping them excited in the categories. So we aren’t 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.
Vivek Maheshwari
Okay, sure. But from a medium term perspective, how do you think about this behavior? Because Nia, Caroline are still entry level, do you think the interest level of younger generation gets much higher because of, you know, because of all the narrative around gold and the fact that it has come under the consideration set whether it’s ETF or gold jewelry. Do you think something changes or. We don’t think as much as, you know, you gauge today?
Arun Narayan
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.
Ajoy Chawla
It’s positive only even from what I gather anecdotally, both Carat Lane and MIA have had enough inquiries for gold products. They may do different kinds of gold products, 18 karat or modern gold. Panishk has seen good modern gold. 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.
Vivek Maheshwari
Got it. And the second point on this gold price bit, you know, and again, I’m not sure if I’m not at least come across anecdotally also, but in a scenario where gold prices are moving up, does that also, you know, worry, let’s say customers to go into a neighborhood store just from a gold price, purity, perspective or otherwise. Or availability. The availability with the jeweler. And that benefits organized players including yourself.
Ajoy Chawla
Quite likely.
Vivek Maheshwari
Got it. Thank you very much. Wish you all the best.
Ajoy Chawla
Thank you.
operator
Thank you. Ladies and gentlemen, we take that as the last question and conclude the question and answer session. I now hand the conference over to Mr. Ajay Ajoy Chawla for the closing comments.
Ajoy Chawla
Thank you. It’s been very good quarter. And thank you for all the wonderful questions that keep us thinking. Look forward to interacting with you soon. Bye. Take care.
operator
Thank you. On behalf of Titan Co. Ltd. That concludes this conference call. Thank you for joining us. And you may now disconnect your lines.