Ladies and gentlemen, good day and welcome to Titan Company Limited Q4 FY 2021 earnings conference call. As a reminder, all participant lines will be 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 an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. C. K. Venkataraman, Managing Director, Titan Company Limited. Thank you, and over to you, sir. Good evening, everyone. It is wonderful and also a little strange to be talking to all of you in this manner. Before I start highlighting the performance for the quarter, I would like to pay tribute once again to all those thousands of women and men in various stores of Titan Company, very diligently and patiently wearing that shield for much of FY 2021 and resisting the disease and presenting a very safe environment for the customers of Titan Company. I would also like to thank the customers of Titan Company and, of course, all the franchisee distributors and warehouse partners, all our partners in the back and all our other partners who helped us cope with this extraordinary situation and, of course, all the employees of Titan Company. I would also like to thank all of you on the call, the investors and analysts who are such well-wishers of the company and keep challenging us on the most important things that we should be delivering. The quarter itself was a fantastic quarter in terms of sales growth. We outdid our own plans and expectations, which we had shared with you when the year began way back in the month of May. The sales growth in Q4 was exceptionally high. Even after discounting for the fact that one fortnight of the base quarter was zero sale, and we had only five fortnights in that base quarter. Even after accounting for that, if you just look at the slide 35, from a 63% for Tanishq to a 10% for Helios to a 28% EyePlus, to an 8% for the World of Titan, we were crossing the targets that we had set for ourselves for Q4, and we're very happy about it. We believe that we have improved our competitive position in the market serially quarter after quarter, and this quarter represents that. The year FY 2022 also began well, in a way continuing the momentum. Of course, COVID came once again to complicate matters, and therefore it would be a little academic for us to speak about it at all on this call, and I would like to defer that conversation to a more appropriate day in the future. All I would say and assure you at this moment is that during FY 2021, we also realized what kind of power we have, on the one hand as a digital organization with substantial digital knowledge and total physical connect on the ground with our customers and how we used it to recover. We also know how many different innovations that we put together in terms of customer acquisition, in terms of cost management, in terms of cash management. Therefore, that entire arsenal is available for all of us to deploy at a more deliberate pace, in a more systematic manner to make sure that whatever targets we have taken, we will achieve them in FY 2022. Coming back to the profit performance standalone of FY 2021. The sales growth was very good at 60%, but for various reasons, the gross margin growth was not commensurate. It's a combination of three or four big-ticket things. One is, of course, a much higher share of the jewelry business in the year and in the quarter. The jewelry business is the lowest gross margin business of the company because of the nature of the business. That increasing share obviously dipped the overall gross margin profile of the company for the period. Therefore, the gross margin growth was depressed on account of the business mix. The second is that we had two other one-time, one of which is accounting one-time. We had a substantial gain in Q4 of FY 2020 on account of FIFO and all that. We had a loss in FY 2021. The combined effect of that was material. The third, of course, was customs duty which we had spoken about, which got reduced, and we ended up incurring a loss in Q4 FY 2021. The last part is the individual gross margins in the businesses and even the category mixes. For example, we sold a lot of coins in Q4 of FY 2021, including a very large order to the Tamil Nadu government. While the studded growth was very satisfactory, the gold jewelry growth and overall coin growth sort of overcompensated for that. Therefore, the product mix within jewelry, the product mix within watches, between watches and wearables also complicated the matter. On top of all of this was a dilution in the category gross margin within each one of those, which we were aware of for many months, but for reasons of continuing to keep the momentum on the sales growth and increasing our market share for FY 2021, and also play our proper role and responsibility to our other stakeholders in the system, so that the vendors get good volumes, the franchisees get good sales value growth, the salespeople achieve their targets and earn their incentives. We didn't correct any of those which we knew certainly H2 of FY 2021, very clearly what was going different from plan. Nevertheless, the quarter ended on an excellent note in terms of sales growth and even profit growth. While the profit growth was not in line with the sales growth and the EBIT expansion that may have been expected did not happen. The EBIT growth itself was a very handsome growth at 35%, and PAT growth at 48%. We're very, very satisfied in the manner in which we ended the year, and we began the year. The current complication, honestly notwithstanding. We realized way back, one year back, that this is a crisis of such huge proportions and so much out of anybody's control, that there is simply no point in fretting about it and wringing your hands. It pays much more to stay calm, confident in the capabilities of the company, the assets on the ground, and of course, the commitment and the sheer willpower that the organization has to come out of any challenge that comes its way. We're sure we'll use all that to overcome the current challenge as well, and emerge on top in FY 2022. What is exceptionally gratifying is that the management of cash and the balance sheet became a well-institutionalized process in the company, not restricted only to the top team. In fact, I would say CEO minus two level, it has deeply penetrated. CEO minus two level people talk in terms of cash, in terms of balance sheet, and that is behind the exceptional cash balance that we're exiting the year with. We're very sure that with the innovative model that we in a way deployed in FY 2021, which is selling off bullion and then increasing the share of gold on lease to free up cash, is something that we have got a very good grip on today, and we will execute it as and when required to the extent required. I would stop here, and thank you once again for all your advice, for all your challenging over the times, and all your support. Over to you and your questions. The first question is from the line of Manoj Menon from ICICI Securities. Please go ahead. Hi, team. It was a good performance, and more importantly, Venkat, I must personally compliment you for, it was an excellent overview which you actually gave, because we have been listening to a lot of conference calls. Truly, it was a very, very good one, actually. I had a couple of questions, actually. One, in the first week of April, when you put out the quarterly update, there was a fair bit of mention about, let's say, the turnaround in Tamil Nadu as a market, the wedding segment, et cetera. To the extent it is feasible for you to comment in a public conference call, subject to obviously your internal confidentiality which you need to maintain. Just very curious to understand what was this thing which you did, let's say three or five things which resulted in this trajectory change. I'm interested in the trajectory change, not about one quarter here and there. The reason I'm asking this because wedding market as an opportunity has been there for Titan and most of the jewelers for a very long period of time. For some reason, a few of them, which probably as an analyst I may have a view, it has not been necessarily fully achieved in the past. Just very curious to understand what your reading Tanishq, the wedding segment, et cetera, which is likely leading to a different trajectory currently. That's question number one. The second one, when I look at the historical or the empirical evidences, it does tells me that when gold price inflates significantly over a period of time, and then there is a correction, consumers tends to even postpone some of their consumption, so essentially leading to a volume surge. Just wanted to pick your brain on, and Ajoy's brain on, what at this point in time, what are you seeing the consumers are telling you based on the gold price behavior in the last two or three months? Thank you. I'll take the call. This is Ajoy. Hi. Nice to talk to you, although it's peculiar circumstances. Manoj, two questions. First one about the Tamil Nadu market. I think the idea of gaining market share in TN is not a recent piece. It has happened over the last couple of years. It's a strategic initiative. We took it as a test case to see if you do a 360-degree approach to the market, can we kind of, A, connect with the customer more deeply? We had a local brand ambassador, Nayanthara has been there. We had customized campaigns for that market, which seeks to connect with the cultural nuances of the Tamil Nadu market and the customer. Two, we also had a fair number of network expansion strategy in terms of some of our older Gold Plus stores, of course, converted into Tanishq stores. Plus we've been adding a lot of stores in TN. We have a fairly formidable network presence across many, many towns and town classes of TN. The third piece is we also recognize that the TN customer is extremely price sensitive when it comes to gold rate and policies on exchange, et cetera, because of the nature of the local competition. We realigned our policies for the TN market also accordingly. The fourth piece is, not so much on wedding. Yes, we are doing some work, in TN, I think that frontier and let's say that opportunity still exists on the wedding segment. I would say a lot of regionalization in terms of products which are daily wear and regular wear products, which we focused a lot on. We are also doing a lot of work on wedding. That is yet to kick in. A 360 approach on a sustained basis over the last two years is what. Of course, a lot of work on the retail and customer experience side as well. Many initiatives taken, we strengthened our team there, et cetera. A lot of work that's gone in, and that is beginning to yield fantastic results. The second question you asked about gold price going up and then correction leading to customers, let's say, coming into the market. Yes, we have seen that. Q4, we saw after many quarters, grammage growth besides buyer growth across all price segments, even the sub 50,000 price segment, which was sluggish even as late as Q3. Across all segments, we saw customers, and we saw grammage growth as well. We also saw some amount of advancing of people buying for weddings, et cetera, in anticipation for Q1 as well. That continued all the way up to April, as late as 20th of April. Yes, we have seen that, and that's added to a good day. Thank you, Ajoy. That was extremely comprehensive. Just one follow-up if I may, and that's the only question I have, is that the Tamil Nadu experience or the learning that you had a strategy, then you had a tactics, then you ended up implementing it. Then you had results also. Do you think there are a lot of learnings from a playbook point of view to be applied in some of the other large gold heavily indexed markets in India? Rather, I mean states. Yes, true. We have been applying some parts of the playbook in other markets like West Bengal, Bihar, even parts of Maharashtra. Not as comprehensively as we've done it in TN. We have a plan to ensure we do that a lot more. In fact, we are seeing taking on different approaches in different markets and doing it in a 360 degree manner is what is actually gaining us good results. Doing all the engines firing simultaneously. Yes, we see that as an opportunity, and we hope to take it forward. Thanks. Okay. Sure. Thank you. All the best. All the best to you. Take care. Thank you. The next question is from the line of Abneesh Roy from Edelweiss. Please go ahead. Yeah, congrats on good numbers. My question is, when I see ad spend, it has increased only 4% while revenue growth has been extremely strong. Has the competitive intensity gone down in jewelry, especially from the larger players and on the smaller regional players because of the way pandemic is extremely challenging situation? Are you getting from ground that some of the players are exiting? If you could comment on competitive intensity, both from larger players and smaller, even unorganized players. Yes, Abneesh, I'll take that call. Ajoy here. Competitive intensity, actually from the larger national players, has only gone up significantly. I'm sure after the IPO of Kalyan, even one more player would be rich with more fund, flush with funds. Competitive intensity has gone up significantly on all fronts. In fact, we've had to do some amount of aggressive pursuit of market share in Q4 which has also in a way, we've given away some margin to gain some share. From local jewelers, yes, they have been impacted significantly. I don't recall of any significant player having vacated or exited the market. Certainly what we are seeing is the tailwind of people moving away from smaller local jewelers to the larger national ones continues, as a consequence of this situation, like in any other disruptive situation in the past. Having said that, there are several regional players and standalone local players who are very strong and who continue to do well. It is a mixed bag. I can't paint it in one go. Yes, if I were to classify it, the larger national players and organized players and the stronger regional players have gained. Perhaps some of the unorganized and smaller players might have lost. Let me also share this, that in Q4, the market itself has also been good. It's not that we are the only ones who've clocked in growth. Many other players have also clocked in growth. We may have clocked in higher growth because of the multiple strategies at play, but I think the market itself was good. On marketing spend, we didn't hold back any marketing spends in Q4. We have optimized. We have done a lot of work between digital and physical, I mean, ATL marketing and BTL activities. Therefore, we didn't compromise. The marketing spends across larger players has actually gone up significantly, and their share of voice has gone up significantly. Sure. My second and last question is, in Q4 and even in Q3, you have done exceedingly well in jewelry. There was some level of pent-up demand, and marriage season was very strong. The update on marriage demand in the FY 2022, how things are. More importantly, in the current scenario, which states still your stores are open? Some business update, if you can give on the current scenario. Are you sharing any guidance for either this year or the long term? On the marriage thing, I think the wedding, you're right, there was pent-up demand for wedding. A lot of weddings took place, and a lot of purchasing for weddings took place in Q3 and Q4, and in fact, was continuing to take place in the month of April as well, even as late as 20th of April. We have been seeing a good growth in that segment. Pre this wave two hitting us, we were extremely bullish on a strong wedding season for Q1, both pending as well as fresh, many, many good days. In fact, we also launched in mid-March, I think we started the Rivaah campaign, and we also had a major PR activity around that the first week of April. All guns blazing with the Rivaah campaign, and it's almost nearing its logical end right now, and maybe we will pick that thread up later. We are bullish on wedding. Current month, it's too early to talk. We were growing very well, as I was saying, up to the middle of the first fortnight and even up to the third week of April. Obviously, with the closures and lockdowns, et cetera, all over the place, that is fast coming down. We may still end April at a marginal growth of over April 2019, but nowhere near the kind of growth that we were aiming for or we were clocking in the first fortnight. We don't have a guidance for the year or the long run right now. Okay, sir. That's all from me. Thanks a lot. All the best. Thank you. The next question is from the line of Prasad Deshmukh from Bank of America. Please go ahead. Yeah, good evening, and congrats on good set of numbers. A couple of questions. One, in your initial assessment, how many stores are now impacted as a result of lockdown? Also, in terms of production, is it still going or production of jewelry, is it still going on or it's like complete halt right now? Since the question is directed towards jewelry, as I understood, I'll take the call again. Yeah. Ajoy here. I think as on yesterday, we had about 50% of our stores were shut and 50% were open. It's a dynamic situation. We have to go as per what's happening. In some places and many markets, we have also taken proactive calls. If we see tremendous risks on the ground in terms of constraints, et cetera. Constraints, et cetera. We are taking the call to shut those stores in those cases. This is happening dynamically on a day-to-day basis. We will continue to do so till things become safer. The second piece was on the production. No, production is still on. This time around, manufacturing constraints have not been imposed in any of the states. Yes, the rate of production has slowed down because we've had to ensure safe production across our units as well as vendor units. In fact, we've engaged deeply with all the vendor community and their Karigars and bench Karigars, et cetera, to ensure they're following this and they understand the importance of prevention. Certainly, the rate of production has slowed down, but nothing is shut as of now. Of course, if there is a situation in any particular unit, we may shut it down for the interim as and when things develop. As of now, nothing is shut. Sure. The last question, I know you just said we will not be able to give any guidance for FY 2022. Safe to assume you would probably come out with some number towards it once the situation normalizes? Is it like a completely dynamic situation right now and it's not on the agenda at this point in time? Actually, Prasad, let me come in here. We had originally scheduled an investor conference on, if I remember right, on the seventh or eighth of May. We had to reschedule it because of the dynamic situation. Now, I don't know when exactly we'll be able to do it. This is what we would have covered in that particular. Correct Conference. We will anyway still plan to do it. I think sometime in June we plan to do it, if I'm right. By then, hopefully, the air will be clear, and we'd be able to take a view on FY 2022, whatever the situation is. At that time, we will share this. Got it. Thanks a lot, sir. All the best. Okay. Yeah. Thank you. The next question is from the line of Rakesh Jhunjhunwala from Rare Enterprises. Please go ahead. Yeah, good evening, sir. Congrats on a good result. Now I would like to know why you have cut the dividend. You have INR 3,000 crore of cash, and until April 15, 2020, your sales, you yourself saying are very good. I don't understand the reason why honorable board has decided to prune the dividend. Oh. I don't know what you're creating this cash for, and what are you going to use it for? No, actually, we didn't actually think we were pruning the dividend, Rakesh. No, last year you gave INR five, this year you gave INR four. Still giving INR four. It's also to declare your confidence in your business. You're carrying INR 3,000 crores of cash. Yeah. No, we don't. I don't understand why you should not At least you not have pruned it, I thought. As a shareholder, I'm solely disappointed. It's not. I'm a little surprised because we had INR 5 in FY 2019, INR 4 in FY 2020, INR 4 in FY 2021. No, maybe they have not pruned it, but I don't know. Giving an INR 4 dividend, sitting on INR 3,000 crore of cash. I don't know, what are you going to do with the cash? Unless there's some emergency or you're acquiring something for INR 2,000 crore-INR 3,000 crore. You're a cash-generating business. For us shareholders, we don't know how some dividend comes. I think this is solely, I don't know why honorable- If I may just come in here. Actually, this is by far the highest payout ratio we ever had, okay? We took that call also with cash in mind, that, yes, we have this INR 3,000 plus crores of cash in hand, and which is exactly why we went way above what we've ever given. What is the dividend policy? You declare it as a percentage of- It is declared. It is being declared as I speak. It will be on our website very soon. Okay? We have a policy. We are talking about a range payout. That is coming out, and this is- Subbu. clearly at the top of that range. Meaning you still haven't formulated a policy. No. We have a policy, but we are now more. We're talking about it. We are giving you a range also as to what we are- Can you tell us that policy, Subbu? Sorry. What is the range of payouts you are declaring? Well, we are talking 25-40. Okay? Yeah. Delivering for a cash-generating business like yours, it's a very miserly percentage. That is the point of view, Rakesh. 3,000 as dividend. Yeah, it's the point of view. Let's also not forget one thing. The cash that we are generating is also because we are doing a lot of gold on lease. If the gold on lease, for some reason, were to be curbed by Reserve Bank or anybody else, just because gold imports are going up. We can't. we are going to be back to square one. For that reason you can't keep swimming. I think we need to be careful. We need to be conscious of the fact that this cash generation- No, for that you can't keep holding cash for a lifetime, Subbu. Sorry? You're holding cash for a lifetime. You can tell me for a lifetime that the policy can be reversed. Anyway, it's the point of view of your board. It's my point of view as a minority shareholder. I think you are being totally unfair to minority shareholders. That's my view. My opinion, and my firm opinion. It's not within the ethos of the Tata Group. Let me tell you. Thanks. We'll take that as an input, Rakesh. Yeah. Thank you. Yeah. Thank you. The next question is from the line of Amit Sachdeva from HSBC. Please go ahead. Hi, good evening, everyone, and thank you so much for taking my question. Congratulations on great set of numbers. My first question is on jewelry, because if I look at till Q3 or even Q2 as the whole recovery was happening, I would assume the growth was led by more Tier 2, Tier 3 towns, and lot of marginal area were also being added there. Q4, obviously, for delivering that kind of number, I would assume that metro markets which were sluggish earlier perhaps would have come back to growth. Why I'm asking this question is because lockdowns is not uniform. Some cities are more impacted, some are less. In that sense, if I were to look at the next quarter and the base effects, can you give us some regional color, like west was still recovering and west was more impacted last year, and the north was good. How should we think about this recovery phase in the light of large metros versus Tier 2, Tier 3 towns? Some understanding would be really helpful, Ajoy. Yeah. Hi, Amit. You're right, it's been a differential recovery and growth. Let me say that Tier 2, Tier 3 towns continue to lead the growth. The pattern of Tier 2, Tier 3 being faster recovery or higher recovery and higher growth compared to metro towns continued as a flavor, and it continued even in Q4. If I were to give you a flavor, the growth, if I see Q4 from a buyer perspective, because that's a useful customer-facing data. It is being led by East, followed by South, then North, and then West. West has certainly been most impacted, and it continues to be, as we know, Maharashtra taking the hit. Bombay and Delhi have been sluggish relative to the rest of the market. In the East, if I look at it, states like Bihar and Jharkhand, Orissa, even Northeast, and then West Bengal have led. In the South, it's really TN which has powered ahead strongly, for us at least, with Karnataka following after that. Punjab and Chandigarh were also decent in the North, as was UP. I must say, UP was following a similar trend as Bihar and Jharkhand. West, it's been a tough situation. Bombay has been the worst impacted. Briefly in between, Maharashtra started doing well, especially upcountry Maharashtra, but in the last several weeks, it's taken a hit. Gujarat also has been fluctuating in its performance. MP has been doing well. This gives you a flavor on. I think how it will proceed ahead will depend on how the disease is spreading out. We think what is happening now to Maharashtra will happen to Orissa later, and so on and so forth. We'll play by market, and we are anticipating different peaking in different markets. Sure. No, that's really very helpful, Ajoy. Can I sort of see that, well, Maharashtra is most impacted, but this has not yet recovered. Although the crisis is unfolding, if it is not widespread crisis like last year, like where there's a lockdown all over and all those things, you would probably think that you could still escape any hard landing of growth. Is it a fair assumption or is it still very uncertain? Very uncertain, Amit. The situation is evolving on a day-to-day basis. Sure we think every market at some point in time will get impacted. It's a question of timing, and we are not able to predict, let's say, Maharashtra- The person you are speaking with has put your call on hold. Please stay on the line. Hi. Yeah, sorry. I was put on hold by mistake. Okay. Anyway, am I audible? Yes, yes, Ajoy. Very, very audible. Thank you. Okay. As I was saying, the timing is going to vary. We think every market at some point will get impacted. The problem that I was saying is that even Maharashtra, let's say, is likely to come out fast. It looks like based on the latest announcement, that it's likely to remain shut down till 15th of May, and then we'll hope for whatever best happens. It's very unpredictable and very difficult to give you a sense. Sure. No, this is very, very helpful, Ajoy, that perspective. Second, if I may ask, like the last time I asked that, I noticed that you announced last time on trunk sales of Taneira. Because why I'm also asking is, it's a business which is still in some sort of pilot phase, and a lot of economics are being tested. So I would assume that a lot of trunk sales happened of Taneira last quarter. What was the experience and has it given you confidence what the business model could shape or it's just still too early days? But I assume that some of it is well received in some markets. Can you give us some color of the recipe plan you had on trunk sales and taking Taneira deeper down to tier 2, tier 3 through existing Tanishq franchisees? The trunk shows of Taneira have been very Sorry, Rajiv, you're on the call, right? Sorry. One second. I'll take this question. The trunk sales of Taneira have been very encouraging in the smaller towns, in cities like Patna and all that. We have a very ambitious plan for Taneira over the next few years and in FY 2022. In specifics, we will share it in the investor conference in May that I spoke of. Overall, we also have two franchise stores now, Amit. Over the last six months, we have got into franchising with Taneira. Sure. Those who are excited to get into this business is growing by the day because everyone is so convinced about the customer value proposition that we have established, and in a way are very clear that we're going to do some kind of a Tanishq in the ethnic wear business with Taneira. The outlook is very, very good. We are very, very positive. More news about it in concrete terms in June. Okay. That's very good to hear, Venkat. Thank you so much. Thanks, Amit. That's all from me. Yeah. Thank you. A request to all the participants. Please restrict it to one question per participant. If time permit, please come back in the question queue for a follow-up question. The next question is from the line of Aditya Soman from Goldman Sachs. Please go ahead. Hi. Good evening. Two questions from me. Firstly, an update on how Golden Harvest is progressing. I think you'd indicated in the previous call that you're also trying some short-term schemes. Any update on that? The second question, I may have missed this, but can you also give us a sense of the customer growth for each of the verticals, watches, jewelry, and eyewear? On Golden Harvest, Amit. Sorry, not Amit. Aditya. The sales through Golden Harvest has been pretty robust. We've seen a good contribution for the year, 21% versus 21% of last year as well. From the month of March onwards and going into Q1, the contribution, understandably so, has come down to 15% because enrollments in Q1 were not there, therefore the impact of that is going to be faced now, we have planned for it to be a lower, let's say, sales through Golden Harvest that quarter going ahead. The enrollments have been good both in Q3 and Q4 even until the shutdown started happening. That augurs well for the future. Your second question was on customer growth. I'll tell you jewelry, then maybe the others would be able to share. On jewelry for the quarter, the overall buyer growth for Q4 stood at 39% over last year. Of course, we must factor in that last year there was a slight base effect, so this 39 is not really reflective. Maybe, I would take it down by about 10%-12%. It will still be a healthy 25% plus of buyer growth in jewelry in Q4. I'll leave to the others to respond on watches. Hi, this is Suparna. In watches as being published, the WOT growth has been around 8% in Q4, and similarly Helios growth has also been good. Most of it is reflecting the quantity, the value is reflecting the quantity. Unlike in the first, in the second and the third quarters, when there was a large increase in average price point, that has kind of evened out in the Q4, and that we saw across the channels, trade channel, LFS channel, as well as e-com. There wasn't a very big spike on the average UCT. Average UCT remained more or less, and whatever growth we got was on the buyers. Thank you. Very clear. Just one follow-up on the Golden Harvest. Can you give us a sense of what proportion of recruitment you're doing online or if that's even possible? Thank you. On jewelry, I can say that recruitment of customers online has been phenomenal. We have seen for the year, if I were to look at, between online and omni, and omni is very important in jewelry because of the high-ticket values. We have seen a 4x of last year in terms of sheer business. Therefore, it's exploding and it continues to be a very big driver. We expect to drive it even further, more than double it again, and we would like to chase that kind of ambition. On watches, perhaps Suparna might be able to share. Sorry, my question was also on Golden Harvest recruitment online, if that can be done online or it has to be done in stores. Okay. Sorry, I missed that. Golden Harvest, yes, can now be completely done online, through the app. We earlier had some challenges on eKYC that has been sorted out. Therefore, we can now do completely online as well. We've had a good response. We think this can really grow dramatically. We have to push this engine a lot more, to make people aware of it, et cetera. Yes, very, very happy with that, and it's happening fast. The base was low. It's starting from zero virtually. No, understand. Very clear. Thanks a lot. Thank you. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Hi, thanks for the opportunity. First, if you can quantify impact of import duty cut in the quarter on jewelry segment margins? Hello? Yeah, there was an impact on that. It will be there in the first quarter as well. In the overall context of things, it's not as material as something that I would want to quantify. Yes, there was an impact. Okay. Second question pertains to CaratLane. In a year where online was picking up across consumption categories, we have made a very decent expansion on footprint there. How should we think about CaratLane going forward? Will it be omni strategy or offline stores will be a very sizable proportion of growth going forward for that brand? Venkat, do you want to answer or you want me to take this? I can do that. Actually, over the last four or five years, we've become very clear that CaratLane's growth lies in a combined strategy. It's an omni strategy actually, because there is a lot of discovery that happens on the site and the handshake and the final product purchase happens in the store. That's because the ticket size opportunities, even in the young women segment, the free ticket size opportunities are large. At INR 40,000 and INR 50,000, the customer would prefer to look at the products and buy rather than just look at an image and buy. To that extent, not having a retail footprint expansion would not capitalize on that very large opportunity. It'll be pushing both the buttons simultaneously to the hilt. That would be the strategy for CaratLane. Sure. The journey of here is slightly reversed that an online brand is going offline. Will it still be online-heavy revenue model with offline being experience center or fulfillment center, or it can, even on revenue form, it can equalize going forward? Yeah. Having said that, if I were to look at our Q4 numbers for studded buyers per se, it has been a fair mix across all the other markets. I cannot say that there is a regional dispersion which is kind of evident. I would certainly believe that because smaller towns have led the growth for us this year, typically studded ratio in those markets is lower than the larger metro markets. That has played a big role. Otherwise, I do not see any trend which says that studded sales have been low. In fact, the buyer growth on studded has been leading that of plain gold. Buyer growth, okay? Customer growth. It is the ticket value in plain because of gold price that has taken the value growth in plain higher. There is no discernible trend of differential growth from the total sales growth. Whatever I said, shared for all the different states holds good even for studded. Got it. My second question is on jewelry margins. Does the business have a fair bit of operating leverage or it's largely a I mean, the fixed cost structure is pretty high in this business. Not so much from this quarter perspective, but when we look at next year, when you have very high growths, with the cost savings that you've done this year, would it be fair to assume a reasonable amount of EBIT margin expansion over here or it will broadly remain in that 12%-13% range? Let's put it this way, that amongst all the businesses, the jewelry business has the lowest amount of fixed costs as compared to all the others. Low margin, low fixed cost. The operating leverage is that way much lower compared to, let's say, watches or eyewear. Having said that, because the scale is substantial, there are certain costs which can kick in from operating leverage. For example, marketing costs or let's say employee costs, et cetera. Those are costs which we have actually looked at very sharply in the current year and also other fixed costs. To that extent, therefore, we've got some benefits and we hope to reap those benefits in the future year. In terms of what the EBIT margin will look like, the challenges here are difficult. We would not be able to give you a guidance, but I just want to give you a flavor that there are constant pressures on gross margins because of competitive intensity which is happening across various markets and. Fulfillment is not the only role that the store would play. The store would certainly play the role of showcasing and persuading and convincing the customer from early stage to the later stage in the purchase journey. It's an integral part because if it is a fulfillment center, then we don't need retailing. We can be in the third floor of a commercial property as opposed to in the main area of a mall. The retailing costs will kick in and that's why it's retailing and not warehouse, not fulfillment. Sure. Very helpful. Last, just one follow-up. Gold on lease emphasis has been talked about in the release today. Is it a tactical move for the year or is it going forward strategic from as a key part of our procurement strategy? You're talking about the bullion sale aspect of it? No, gold on lease has been called out as. No, gold on lease- there's a renewed emphasis there. No, gold on lease has been central to the growth of the jewellery division ever since 2000 or 2001 when we got it into our system. A good part purchase which is essentially the purchases we make from customers through the exchange program or the outright jewellery. That share versus the gold on lease share in a way determines the capital employed in the business and keeps us asset light and returns a certain very attractive level of capital, I mean, return on capital employed. To that extent, the continuous management of that is critical to the Titan Company's balance sheet and performance and that's the angle to that. Nothing more. Thanks. That's all from my side. Thank you very much. A request to all the participants, please restrict to two question per participant. The next question is from the line of Ashit Desai from Emkay Global. Please go ahead. Yeah, hi. Thanks for the opportunity. My question is on studded jewelry. You highlighted the growth trends for jewelry across markets. Could you also share, the slower growth in studded, is it a feature across markets or is it more due to the sluggishness in some of your key markets like Maharashtra, Delhi, et cetera? Yeah, I will just share with you. Yes, certainly the mix. There are two factors at play. There's a mix of markets and then there is the growth across markets. Now if I look at mix of markets, you are right. Bombay, Delhi, which typically has a much higher studded mix for us. Those markets being a little bit on the back foot in last year and last quarter has played a role. Our main goal is to ensure that we continue to grow market share and go towards our ambition that we had set out. Maybe yes, a year has gone by which has kind of held us back, but our ambition continues to be that high and we see tremendous headroom for market share gains. To that extent, we would rather invest that money back into the market, back into the network and back into inventory, et cetera, to ensure that we are able to continue to grow aggressively and maybe maintain profitability over a period of time. Got it. If I may squeeze just one small one last. I just wanted to know your aspirations for CaratLane margins. That's it for me. Thanks, and all the best. Venkatesh, we can't hear you. Nothing to share at the moment on the CaratLane margin. We will talk about it in our June conference perhaps. Thank you. Ladies and gentlemen, requesting you to stick to two questions per participant. If time permits, please come back in the question queue for a follow-up question. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead. Yeah. Thanks for the opportunity. Just wanted to check, what has been the learning from FY 2021 on the impact of store closure? Is demand only postponed if it comes back as store opens and life normalizes, or did you see any demand destruction? Would you say that the consumer behavior is different in case of watches, and there is actual demand destruction as you've not seen any pent-up demand in that category? That was one, and second one was, what was the contribution of wedding and high-value studded jewelry in FY 2021 versus FY 2020? Where are you versus your market share aspirations in these two segments? Let me give you a larger view on this subject, then Ajoy can speak thereafter on the specific question that you asked. See, while the products that we sell are reasonably high-ticket categories and what you may generally consider as considered purchases, some of them, and even in jewelry, they're also linked to events, even impulse to some extent. For example, all our watch stores in the malls, whether it's a Helios or a World of Titan or Fastrack, or even in a Linking Road, 100 Feet Road in Bangalore, there's a fair amount of young people who walk around in that area. In a way, they're not in particular search of a particular product. Because the store is exciting, it is inviting, they go in and buy. There is a birthday that is happening in the month of April, the birthday is an event, but the event passes, and the store is shut when the birthday is happening. I doubt if that purchase will be postponed to, let's say, later, when the store actually opens. The birthday and the event on that, the magic of the day has passed. To some extent, that sale is not going to come back. In jewelry, I would think maybe the majority certainly of the sale is in a way considered purchase because of the nature of the category as well as the ticket size. Especially if weddings don't happen, they get postponed. If weddings happen and the stores are closed, that sale may not come back. It's not an easy, full kind of answer. I think by and large, we are okay as a company as opposed to an apparel company, for example, which will be far more impacted because of the nature of the category as well as the ticket size of the category. If the time passes, it becomes lost sale. Ajoy, now you can carry on. Yeah. To add to Venkatesh's point, we saw last year in especially, let's say, the months of June, July, we saw many missed milestone celebrations coming back to us, maybe because they had planned, as Venkatesh said, for the jewelry during their birthday or anniversary. We saw a spike in June, July, but thereafter it settled down to what it was. Weddings, for sure. Your second question was on the contribution or growth of wedding. Can you just repeat that? Yeah. Wedding and high-value studded jewelry, what was the contribution to sales in FY 2021 versus FY 2020? Where are you versus your market share aspiration? Do you still see a lot of legroom for market share expansion in these two segments, which you aspire to grow in? Yeah. In terms of contribution, if I look at weddings, it may seem like for FY 2021 we were same as last year, 23% last year and this year. However, if I were to knock off the impact of coins and then look at the contribution on the jewelry part of it, there is clearly a 1% improvement there with a 2% improvement which we saw in Q4. Q4 was 24% this year versus 22% last year contribution, and FY 2021 has been 25% versus 24%. There's a 1%, but we are still way off. Most jewelers actually see 50%-60% contribution from wedding. We still have a lot of headroom, notwithstanding the fact that we sell a lot of everyday adornment jewelry as well. On high-value studded, the growth has been decent in the second half, I must say. Earlier, we are seeing a very depressed scenario in terms of what is the contribution. It has certainly come back to what it was last year, and in fact, for the year, it is the same contribution of around 10% over last year as well as this year, thanks to a good action on the second half. Opportunity is high, especially if you ask me on solitaires, where we are growing rapidly and the opportunity is really huge, and milestones are very important. We are very well placed to go after that. On the very high-value studded, I would say between the INR 2 lakhs-INR 10 lakhs space, the opportunity is richer for us. Above INR 10 lakhs, there are many other constraints like PAN card and other things which start getting into play. Those are things which are still a little unless those things improve. Between the INR 2 lakhs-INR 10 lakhs, we certainly see a lot of opportunity for high-value studded as well. Got it. That's it from my side. Thanks, sir. Thank you. The next question is from the line of Jay Gandhi from HDFC Securities. Please go ahead. Yeah. Hi, thank you for the opportunity. Just a couple of questions. If you look at the gold on lease, it's nearly double that of a typical year and probably 3x that of FY 2019 or FY 2018. Just wanted to understand what are the underpinnings of the decisions that you go through, which kind of dictates the maneuvering of a sourcing in a certain direction. Shibu, you want to answer that? Yeah. Okay, actually what we would want to do as much as possible, and I'm going back in time, seven, eight years back before the curbs came on gold on lease at all. We used to source more than 70% of our gold on lease. Two reasons. One is, of course, the cost was lower. Second, it was a natural hedge. Therefore, any impact on financials on a quarter-on-quarter basis was actually minimum. Third, of course, was the fact that in those days it was also not very easy hedging in India. If you remember, we had the curbs which came in 2013 and 2014. We had no option but to explore doing more and more of the hedging here because we were not allowed to buy gold on lease. Right? We had to do that. That, in a way, started developing its own process, et cetera. We've also came into a level where we were not worse off from a cost perspective also. Having said that, we still believe gold on lease is possibly the best way of buying gold. As I said, the volatility in margin, clearly the people valuations, all of that, it is still the lowest, therefore we would prefer to do it. It does generate a lot of cash also, as you can see now, the INR 3,000 plus crores of cash that we talked about is a result of that. We would therefore focus as much as possible to get back to that same level of gold on lease as we used to do in the past. Well, that I understand. I'm just looking, let's say FY 2018 to till date. All these issues that we had were historical. FY 2018- 2021, what has happened. What has happened during that period was that the exchange gold. Our exchange programs have become extremely popular from 2017 onwards. Okay? That contributed a lot to gold akin to buying it on spot. This year we went ahead and actually disposed off some bullion and resorted to buying gold on lease. That's the difference that we are talking about here. The gold exchange program as actually is continuing in its popularity, it is still contributing a substantial amount of the gold that we procure, but what we are doing is also swapping it to get as much gold on lease as possible. No, fair. Thanks a lot for that. Just one thing. If I consider gold on lease as this low-cost debt and hence part of the capital employed, because anyway this INR 3,000 crores cash cannot necessarily be used for dividends or whatever, at least largely. Is it an obnoxious assumption that we as an analyst community might? Actually, each analyst looks at it differently. The reason we keep taking gold on lease as a payable in a way is because that's how it's traditionally been. Okay? It's more of a supplier credit as that's how we've been treating it. Yes, each analyst possibly takes it differently. Thank you very much. Sorry to interrupt you, Mr. Gandhi. The next question is from the line of Percy Panthaki from IIFL. Please go ahead. Hi, sir. Just trying to understand your underlying performance for this quarter in the jewelry division. There were couple of one-offs. One was the customs duty and one which is across all divisions, of course, is the reversal of the employee compensation cuts with retrospective effect from May. Your reported margins of 10.9% in the jewelry business. If I just want to look at the underlying performance and remove the one-offs for the quarter, these two one-offs, which I spoke about, what would the margins be in that case? I just wanted to know that. Percy, we won't be giving you those numbers here. Okay? We have, I think, explained to you what the main basic reason or rather why the margin was lower than what it traditionally would have been, and that too, particularly based on the top line that we have achieved. We mentioned basically two major reasons. One is the mix. Okay? The studded ratio is still much, much lower than what we used to be in the past. The coin ratio is substantially higher than what it was in the past. Fundamentally, mix itself is an issue. On top of that, we also said that we have been looking at gaining share rather than focusing so much on margin. To that extent, our focus has been to gain share in a year where we thought this is the best thing to do. That should explain your question. We can't give you anything more than this. Okay. Sub-question to this. In an earlier question, I think someone mentioned that there would be some amount of custom duty hit in Q1 as well. Didn't understand why that would be the case, because I thought this is a one-time correction of custom duty in the February budget, and you would have accounted for it completely, whatever inventory you held as of 1st of February would have got marked down in this quarter. Yeah, Percy, we can't mark it down because our NRV is still higher than the cost. Okay? Therefore it can only go as and when it gets consumed. Oh, I see. Okay. We can't do that. We can't do from accounting standard perspective. Therefore it does play out till that stock gets consumed. Oh, I see. Okay. Yeah, that's all from me. Thanks and all the best. Thank you. Thank you very much. Ladies and gentlemen, due to time constraint, that was the last question for today. I will now hand the conference over to Mr. C.K. Venkataraman for closing comments. Thank you very much, everyone, once again for the exceptional and the probing questions every time. Till we meet again, goodbye. Thank you very much. On behalf of Titan Company Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.