Ladies and gentlemen, good day and welcome to Q2 FY25 Earnings Conference Call of Titan Company Limited. 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 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 from Titan Company Limited. Thank you, and over to you, sir. Thank you very much. Good evening, everyone on the call. It's good to join you immediately after a wonderful Diwali. Happy Diwali belated to all of you. And we're also happy to do this call on top of a good growth quarter in Q2. I would like to circle back at the end of the call to give my broader comments on the company and the various parts. Now, I can hand over to the people who would like to ask us questions, please. Thank you very much. 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 two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes, sir. Hi. Thanks for the opportunity and congratulations on a good growth performance in Q2. My first question is on margin, sir. In the jewelry segment, there has been a 270 basis points margin drop. I just wanted to understand if you could segregate this into various margin brackets. Is it due to a pressure in gold price margin, weaker revenue mix, or higher promotions on making charges, marketing, etc.? So broadly, if you could help us understand the breakup of this. Hi. This is Ajoy here. We had two, three impacts on margin this quarter. One was a substantial part of it is on account of the one-time customs duty loss, which has flown in already part of it in this quarter and partly in the next. That's a substantial part of it. Beyond that, it is to do with the studded mix being lower than the expected one, again on account of two factors. One is there was a gold rush of sorts in quarter two. Therefore, the gold component was much higher, including a substantial rise in gold coins and bullion purchases. And the other is instead of the solitaire, particularly the large carat stone, demand has been under pressure due to price uncertainties in the market linked to international demand supply situation. So all these three factors actually contributed to most of the reasons for the margin drop. Some amount of marketing investments for the brand, etc., to drive growth would have contributed, but that's not substantial. That would be a very small impact. Maybe we can just quantify, Ajoy, customs duty impact in the quarter is 94. Yeah. That's mentioned in the PPT, yes, Sir. Ajoy, I also wanted to understand the reason behind this weak sort of growth in studded. Obviously, solitaire, you mentioned. So if we have to divide it into two broader reasons, one is from a studded perspective. The other competition is sort of giving relatively better pricing on studded. That is one. And the second, obviously, is the growing noise around the lab-grown diamonds. So what do you attribute this to as of now among these two reasons? So as I said, the solitaire demand has been a big contributor to the impact on overall studded. If I exclude solitaire and look at the growth without solitaire, actually, the studded growth is quite heavy. Okay? And even within solitaire, I can further specify that the bigger stones where price uncertainty is high and where there is a certain investment mindset which exists for those people who are buying higher carat stones, one carat, two carat, and so on and so forth, they have been holding back because they're waiting for prices to settle down. Now, it is not entirely clear, is it, because of lab-grown, but it is also true that international demand in China and many other markets which have nothing to do with lab-grown has also been on the back foot. And therefore, there is a demand supply issue on large-sized solitaire stones. Competitive pressures-wise, I don't see a big issue because, as I said, studded jewelry demand has been good. And in fact, buyer growth has been in healthy double digits across price bands. So even the sub-1 lakh price band, which some people might ask. So actually, we are very happy with the buyer growth in studded. Therefore, more customers are in the market for studded. Just a small follow-up. What would be qualitatively the margin difference between solitaire within studded and the other smaller pieces that we sell under the studded jewelry? No significant difference. Understood. Okay. Thanks for taking my question. Thank you. The next question is from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Hi. Thanks for the opportunity. Ajoy, the first question is most categories, consumer categories at large are being soft this quarter, except jewelry has actually done well at large even as a sector. How do you gauge consumer sentiment? Any early read on festive or wedding demand trends also? Right. I think the consumer sentiment was good, I would say, in this quarter. The only slight, let's say, adjustment we have to make last year, Shradh was in October, most of Shradh, all of Shradh. This year, 13 days out of the 15 days of Shradh was in September. So it kind of shifted quarters. And while we factor it into our business plan, that when you look at it from a calendar perspective, it may not strike you. And therefore, I see sentiment to be very good. Even festive sentiment has been excellent. So I think it's fantastic. The same you would extend to wedding jewelry demand also? Yes. Wedding jewelry demand started picking up post the customs duty reduction announcement because there were many fence-sitters which we believe from first quarter and election and all of those factors which impacted first quarter who were waiting. Once gold prices corrected, many people came in, and as we speak also, because festive is a good period to also pick up jewelry, festive wedding has picked up, and we think it's a good run ahead for the next two quarters. Yeah. I'll follow up there. So with high gold prices, are you seeing any shift towards lighter or more affordable jewelry or any preference trending across price points or regions you can share? Actually, no. We have seen that higher value jewelry in gold, especially if I look at it, has continued to do well. In the lower, very low price points because of the price of gold having gone up, some products have moved price bands. So on gold, I would say there is, in fact, no indication that it is only lightweight, which people enter. It's pretty much what it is. In the diamond studded, there was some, but I think I'm not sure with the consumer sentiment. I think the ticket size in studded was impacted partly on account of solitaire and partly on account of a delayed launch from our side in certain price bands. But I don't see any correlation coming out there. Lower price bands in diamonds have done very well. Whether you look at CaratLane, whether you look at Tanishq, Mia. So not seeing any trends. Sure, and the last one on lab-grown diamonds, so we have been wait and watch or monitoring the pace for the last few quarters, as you called out. Any early findings on consumer interest now or any pilot initiatives underway that you can share? No, we continue to observe. We are not seeing inquiries across our stores other than clarifying that all the diamonds we are selling are natural, etc. We continue to observe and study the customer and keeping a close track of it. So as of now, nothing more to report. That's all from my side. Thanks and all the best. Thank you. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Yeah. Hi, team. Thanks for the opportunity. Just on the margin front first, we have seen the first half at almost about 11.3% adjusted for this customs duty. Would you still look at 11.5%-12.5% for the year? Is that a range that we can kind of how should we look at FY25 if you could give us some sense? Okay. I think given what we have done in H1 and the likely attraction of gold continuing, I think FY25 looks like more between 11 and 11.5. And then maybe we can come back that are we going to go back to our original guidance for the next year. Got it, sir. Perfectly clear. And just a second question is on, again, sorry, on lab-grown diamond. I hear you clearly on the consumer adoption. I just wanted to appreciate that within the Tata Group, one other company has launched lab-grown diamond. Does that indicate or preclude any possible entry by us? Or how should we look at that? Or would love to hear your thoughts on the same. Hi, Avi Mehta. Trent is a big box retailer and they sell multiple categories. So they sell perfumes. Titan sells perfumes. They sell women's bags. Titan sells women's bags and salwar kameez and so on. So in a way, it is natural for a big box retailer to consider fashion jewelry and the introduction use of the lab-grown diamonds in their fashion jewelry. We are a category expert. We create brands. We create EBOs, and we play the game very differently. And both of us are free to pursue our own destinies. I think because the lab-grown diamond is a strategic subject in the jewelry industry, obviously, this question is raised as opposed to perfumes or bags. I understand that. But it certainly does not preclude us at all from doing anything that we want. It is just that we choose to do our business in a particular way. This is a matter of such strategic importance that we would announce it when we are ready to announce it. That's all. Got it, sir. And sir, just to clarify, if I heard your comment correctly, the current performance of non-solitaire studded jewelry reaffirms our expectations. That's the right read through on how would you look at lab-grown? Yeah, yeah. The non-solitaire side of the demand is very good and healthy. Perfect, sir. Thank you very much. I'll come back to it. Even Solitaire, the smaller carats are actually doing very well. So the bigger carats, whether investment-oriented buyer is there, who's waiting and watching. And that's what customers have also told us. Sir, any share that you could share of how roughly it would be salience for us, the large diamonds? Because I would assume it would be a little bit smaller share. It is a fairly small share. But in the recent past, we had upped the game in the last two, three years. So we had clocked in very, very good growth. So the base effect has played a role. Otherwise, it's a small share. Thank you very much, sir. That's all from my side. Thank you. The next question is from the line of Jay Doshi from Kotak. Please go ahead. Yeah. Hi. Thanks for the opportunity. Just clarifying on the guidance for EBIT margin. The earlier guidance was 11.5%-12.5% at the consolidated jewelry EBIT margin. So has that now changed to 11%-11.5%? Basically, it's consolidated jewelry EBIT or standalone? Yeah, you must appreciate that it is Titan jewelry is the significant part of that. So whatever applies to Tanishq would actually hold true for the consolidated also. So it is overall. Overall. So if I look at the first half numbers, recurring EBIT margin is 10.5% for jewelry business. And for you to sort of deliver 11.5%, it means the second half should be 11%. The lower end, second half should be 100% better than first half. So are there any sort of efficiency levers or any trends that you're sort of seeing in the market that gives you confidence of improvement in second half margin improvement versus what we've seen in first half? And I'm referring to recurring, excluding one-time impact of import. I understand. So some of the initiatives which have been taken on, and they are in the early stage or some are slightly advanced stage, kind of makes us believe that some improvement we can do. Even like diamond jewelry that the gold content and the inherent margin of that stuff have gone down slightly, may slightly stabilize. And even quarter three and quarter four likely performance, which we think, including CaratLane, CaratLane also margin trajectory would be slightly better in H2 for sure. And that's what gives us confidence in quarter H2; it will be slightly better off than H1. And yeah, I'll just supplement on the demand side. We have always maintained that this year, quarter one would be the weakest because of the many, many factors at play. We spoke about it. H2 is therefore expected to be certainly better than H1. Certainly for diamonds, even more so. That gives us the confidence that it would be a better margin play in H2. Sure. And is it possible? So when we look at this quarter's margin of 11.4 versus 14.1 last year, there is a 270 basis points drop. And when we look at 1Q, the drop was actually not that much on a YOY basis. And 1Q was a much weaker quarter from top-line growth or operating leverage perspective. So is it possible to break down this 270 basis points recurring EBIT margin drop this quarter? How much of that is attributable to, let's say, weakness on the studded side or mix? And how much of that is basically competitive pressure in the gold business? Most of it is studded product mix, and studded product mix and gold coin mix also being, and some of it, as Ashok pointed out, the gold price component in the total material cost of the studded piece also adds up into that, and therefore, it is really linked to studded share, not so much on the competitive. Studded margin a little bit. Studded margin will get impacted. Therefore, on that gold price going up and product mix on account of studded share and gold coin share. These are the three factors beyond. As a thumb rule, my understanding was 100 basis points drop in studded share would account for about 20 basis points impact on margin. Is that correct? Or you think it will be much higher? We can't confirm that because product-level margin discussion we don't do. Understood. Sure. Okay. Thank you so much. I'll get back in the queue. Thanks a lot. Thank you. The next question is from the line of Percy Panthaki from IIFL Securities. Please go ahead. Hi, sir. Just a question on consumer behavior. So supposing if there is a consumer with a budget of, let's say, INR 1-1.5 lakhs who wants to buy diamond jewelry. And supposing this customer is now saying that, "Okay, let me evaluate a jewelry made from lab-grown diamonds." Then what does he do in this situation? Does he buy similar type of jewelry by slashing his budget? Or does he more or less maintain his budget and upgrade the quality or rather the caratage of the diamonds? Very hypothetical question. I'll try to answer it in the most factual way I can. INR 1-2 lakhs price segment has seen fantastic buyer growth for Tanishq in this quarter. And it continues. So I sense that customer is not swinging too much. Okay. If it was, we would have started seeing some weakness. Second piece of information that I have picked up from whatever consumer understanding and market work is, the moment lab-grown jewelry goes beyond 1 lakh, the customer interest significantly falls. In fact, most of the players are selling products largely in the sub 1 lakh space and maybe 50, 60, 70 thousand. There is a segment of people at the very top end who might be asking their jeweler to give them a lab-grown in big stone, which may be in that 10, 15 lakhs. That's it. It's difficult to estimate that demand. But most of the players that you see in the marketplace are selling pretty much sub 1 lakh. So I think beyond 1 lakh, there's a barrier in the customer's mind, is my understanding from whatever I've seen. Understood. Understood. So let's say supposing there is a customer who wants to buy in that INR 1-1.5 lakh ticket size. And supposing I know you said that he's unlikely to go to lab-grown diamonds. But supposing he wants to buy a very, very similar piece made through lab-grown diamonds, then how much does he actually save on his budget? Does that INR 1.5 lakh become INR 50,000? Or does it become INR 1 lakh? What is the rough ballpark here? It will be below 50,000. Okay, so he basically, even at a 1.5 lakh ticket size, which is a studded jewelry, which means that there are multiple pieces of diamonds in it, even at that point, he saves like 65% of his cost. See, I don't know whether he can get the same piece with the same stone configuration. He may be able to get something at INR 50,000-INR 60,000, which may not have exactly the same stone configuration. It's a very difficult hypothetical question. But by and large, I think he would not, the person would bring it, the budget would come down to INR 50,000-INR 60,000, maybe max INR 70,000. Or maybe 2-3 pieces. And for what it is worth, to answer your first question, in the American market, the general tendency of people is to buy a much bigger product for the budget that they came with. So 1 lakh, let's say $10,000. So I would buy a much bigger stone for the $10,000 and in a way, make myself and my bride to be happy with that bigger stone. That's the tendency in the U.S. as opposed to buy a similar product at one-third the price. So if that is the case, Venkat, then what stops us from getting into this segment? Because my understanding is what's stopping us is the value depletion that if we start offering LGD, the top line itself will suffer even if the volume goes up. But if the top line is more or less maintained and the gross margins anyways are quite healthy on LGD, then what is the detriment in you launching this product? Why do you think anything is stopping us from getting into this? We're not yet launched. Right. Okay. Understood. That's all from me, Venkat. Thanks. Thanks again, Venkat. Thank you. Thank you. The next question is from the line of Nihal Mahesh Jha from Ambit Capital. Please go ahead. Yes, good evening. I have a first question on the demand bit, Ajoy. The press release mentioned that there was strong momentum till mid-September. Just wanted to clarify that after the initial spurt that you saw post the duty cut, has the demand trend sustained or there has been a sharp moderation? Just wanted to clarify that part first. No, it sustained. I would only say that there was a pause during the Shradh period, which started around the 17th of September till the end of the month, and actually till 2nd of October. From 3rd onwards, again, it picked up. Of course, this excludes Bengal because they start their puja purchases, but after that, it's continued well into the season. Understood. That's clear. The second question was again on the LGD bit. As you also highlighted, based on what you've discussed in this call, that the demand for LGD is mainly in the sub 1 lakh price point at this point in time. And more than Tanishq, I think CaratLane operates in that point as well with a very high share of solitaires. So is it right to say the kind of a customer that a CaratLane serves and also say if LGD becomes more fashion-oriented, that that is the brand which could see maybe more migration of customers and maybe that's the brand where LGD launch would make sense? Just your thoughts on that. Actually, we wouldn't like to share anything about our strategy, whatever that is, when it is going to be on this. So it is actually, if you really think about it, it's a matter of strategy that you're asking us to agree before we actually launch anything like that, right? So like I said earlier on the call, we would speak about it in detail when we are ready to speak about it. Just one factual correction that CaratLane doesn't have it. Looks like you said that they are selling a lot of solitaire. That's what it is. No, no. Studded. I meant studded. I'm sorry. Yeah. Studded. Customer match. So let me also just reiterate another point. CaratLane growth has been fantastic in this quarter. Mia growth has been fantastic in this quarter. Tanishq sub 1 lakh studded growth has been fantastic this quarter. And overall buyer growth also has been in early double digits, which is very good for studded. So there is no current sense that this is getting impacted if that's the hypothesis you have. So I'll just correct. Maybe it is not about this quarter and not about the impact, but just, would that customer be more relevant from an LGD perspective, let's put it that way, rather than a Tanishq customer? Very difficult to comment because right now, there is no data to give evidence on that front, not just now, over the last several quarters, and this question has been coming and this hypothesis seems to be alive since the last several quarters almost continuously, and currently, the data is not showing up. Understood. Sure. Thanks, Ajoy. That was it from my side. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer all the participants, please limit your questions to two per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, good evening. Thanks for the opportunity. Ajoy, just two observations. Our studded ratio has come down to 30% and in Tanishq it has grown about 12%. While in CaratLane, what I'm reading is about the growth is about 41%. So is the nature of the business what I'm trying to understand, is there any overlap of the customers between CaratLane and Tanishq? And what you mentioned, is the shift which is happening from, say, a particular customer who's buying, say, less than 1 lakh studded at Tanishq is now moving to CaratLane? So we do look at it as a portfolio. And in sub 1 lakh studded, as I said, the portfolio is going double digits in terms of buyer growth. And the growth in CaratLane is certainly high because of the expansion that has happened in the past and will continue to be showing higher growth. It's also a much smaller base. In the case of Tanishq, there is no reason to believe because even Tanishq has a large dependence on the sub 1 lakh studded number of buyers. And we have seen actually good buyer growth even for Tanishq and Mia, which is there in Tanishq stores as well as Mia as a channel by itself. So there may be some flow here and there that keeps happening, but it's very difficult to quantify that. We have not really got into that level of depth. We do look at it as an overall portfolio. If I can add. Yeah. Yeah. Yeah. I think Venkat wants to add. So let me add. CaratLane's play is by and large in the sub 50K if you look at the real price point-based segment. So it is not even at 1 lakh. It is significantly below 1 lakh and 30 to 50 thousand would be the max of our product that we sell. Yeah. So the reason why I'm saying I had a firsthand experience around Diwali. So we went to the nearby store which was next to CaratLane. And we saw a lot of people around CaratLane. And people were completely buying only gold from Tanishq. So is there a segmentation happening within the consumer minds? That's my fear. Actually, there are multiple angles sitting here. First of all, CaratLane is Tanishq. Secondly, CaratLane is so famous for good-looking affordable jewelry. Tanishq is so famous for exquisite jewelry. And Tanishq, the first thing you think of Tanishq is not good-looking affordable. That's not Tanishq. Tanishq, when you ask so much about the wedding, for example, or if you take the campaign of Tanishq for Diwali, it's necklace, which is exquisite, big jewelry. So natural place for customers to go for affordable, good-looking jewelry would be a CaratLane or a Mia. And therefore, you will see a lot more people sort of crowding in that store and in a small store, 10 people will look crowded. In a big store, 20 people will look not so crowded. So that's also there. But the more important thing is what the brand is famous for and why people buy. A lot of gifting happens in CaratLane. All these are there as dimensions. And gold. See, season time, gold is a very big draw. The play of gold in Tanishq is far higher than the play of gold in CaratLane or Mia for that matter. It's completely the other way. So there will be a crop for gold always. Okay. Just one quick follow-up on jewelry. Venkataraman, what is the new buyer contribution or new buyer growth? Because you have given total buyer growth is at 12%. Total contribution of new to repeat in the current quarter continues to be similar as last year. The growth is around the same, around the same percentage that we have seen. So both have grown at the same rate. Okay. Second and last question to Suparna. We have seen that analog is doing much faster and last two, three quarters, it's double digits. So is there a particular trend or is there a particular product innovation or mix we have tried to showcase to the consumer? And how long this growth will continue? Do you think this is now in the base? Yeah. For Suparna here, you're right. Analog is seeing good growth in the last few quarters. And it's on the back of very strong product design and innovation. Also on premiumization. So if you see Titan Brand or the Helios chain or, say, international brands doing very well, the premium sub-brands like Nebula, Edge, etc., doing very well. So this has been going on for a while and this trend is becoming stronger and it is really getting manifested in very well-designed collections with very good value for the consumer for that price point. And also supported by very good execution both in our stores, on-ground stores, as well as in the play that we have online. So it's a combination of many things coming together. And we do believe that our product pipeline and the overall product strategy will keep delivering good results for the next few quarters. Yeah. I got that. Does that mean that that 14.9% EBIT margin what we have shown, there is upside to this margin? Difficult to say. I would go back to what we had said during the investor day that 13%-14% is definitely in the range that we will commit to. Okay. Thank you and all the best. Thank you. Thank you. The next question is from the line of Krish Shanbhag, an individual investor. Please go ahead. Yeah. So my question is on the loss due to import duty cut. Historically, you have always said that you hedge your gold, so there is no impact of falling gold prices. So why is there a loss when you have hedged yourself? So we will try to explain. We source a lot of gold through Gold on Lease program where the price, which is a natural hedge because price is fixed on the date of sale. So that gold inventory is in a way price-wise not exposed, but customs duty is already paid. The day we source that gold on lease, customs duty is paid, but the price is fixed on the date of sale. So that inventory is always exposed to customs duty variation. In the past, sometime when customs duty went up, we made some gains also. And that also, if you go in our quarterly results, you will find that we have talked about that. This time, the drop was very steep and that is why a significant loss. So just to elaborate, make it totally clear. If INR 100 was the import rate and INR 15 was the customs duty paid, we paid the INR 15, but that INR 100 was floating till we fixed it, which we typically match with sale. So if INR 100 became INR 105, we sold it at INR 105, fixed it at INR 105, no loss. But the INR 15 was INR 15. And we couldn't hedge that INR 15 separately. And if the INR 15 fell to INR 6 as it fell, INR 9 we had to lose. We ended up losing. Thank you so much for the clarification, sir. Thank you. The next question is from the line of Saurabh Mondal from RK Advisory. Please go ahead. Hello. Am I audible? Yes, you are. Please. Yes, please. So my question is about analog watches. What is the trend there and if you could get some sense about price category trend? And last three years and going forward, what is the revenue share of analog to whatever category? So the trend is, like I mentioned earlier, there is a very clear premiumization trend where watches above INR 5,000, INR 10,000, INR 15,000, etc. are doing very well. We are seeing good growth in, like I said, brand Titan, which is kind of spearheading the growth. As far as the proportion of analog to wearables, the last couple of years, we had seen wearables share go up. But now with the wearables market in a bit of a correction mode, we are seeing that the analog share is higher. Okay. Thank you for answering my question. Thank you. Thank you. The next question is from the line of Aditya Soman from CLSA. Please go ahead. Hi. Good afternoon. Two questions for me. So firstly, in terms of steady-state margins for jewelry, what would be sort of a steady-state margin one should expect over a medium term? And has the guidance on that changed at all? And secondly. Your voice is not very clear. Steady-state margin. Okay. Steady-state jewelry margin, right? That was your question. That's correct. Yeah. And second question, you had a second part to your question. Yeah. And the second question is on these emerging businesses. We see, I mean, the level of profitability even on a year-on-year basis hasn't improved in practice for some slightly. So how do you think the trajectory on profitability plays out over the next few years? And what would be the drivers for improvement? Okay. So emerging businesses for sure are in the investment phase. Growth is far more important than margin. But yeah, as the scale is growing, some of the gross margins are improving. So they can. But I think we are right now focused on them achieving the right scale and rightful position in the market. Jewelry, as you answered earlier, for FY25, we think 11%-11.5% seems to be the band which we will be able to deliver. And then at the end of the year and beginning of next financial year, we will be able to have much more clarity that going forward, what kind of number can be delivered. And then maybe we will give. But no significant change in terms of the structure is happening. 11.5%-12.5% to now we have talked about right now 11%-11.5%. So we might go back to the original band. But yeah, we will wait for some more time to kind of give that guidance. All right. Very clear. Thank you. Thank you. The next question is from the line of Siddhant Dand from Goodwill. Please go ahead. Yeah. Hi. So my first question was about, there's been a proposal to hike GST on luxury watches, about INR 25,000, I think. So what percentage of our sales would that be? And secondly, would it hamper our plans to open ultra-luxury watch stores in Helios? So right now, it's a proposal. I think the group of ministers has recommended to the GST Council. So we will have to wait and see how it actually pans out. Our proportion of watches above INR 25,000 is not very high right now. But given the fact that premiumization is a very continuing trend, it will become higher and higher over the next few years. Would it be a rough band of what% of top line would those be? At this point, we will not be able to share. Okay. Secondly, my question was regarding our Golden Harvest. Competitors have come up with a little more aggressive schemes. So has that program been affected? No. In fact, we ourselves have innovated a little bit on the Golden Harvest. We have launched another version which also enables customers to fix their gold rate, etc. And the benefit is different from the Golden Harvest usual scheme. So put together, both our programs are doing well and enrollments have been good. We have not been impacted by whatever competitors have offered. They have continued to offer historically or some more aggressively. So it's not that something new has happened. I think there is an intrinsic sort of relationship between preference for that brand and preference for that Golden Harvest equivalent of that brand. People want to buy Tanishq and people sign up with GHS. People want to buy some other brand, they sign up with the program of that. Okay. Understood. My third and last question would be one of our biggest moat was we were able to give a Karatmeter and verify people's adulterated gold back in the day. So is there any sort of pilot or any idea around identifying whether someone's jewelry is a lab-grown one versus a mined one within the store itself? Good idea. We should attempt it. We mentioned it in our media interaction when we did the De Beers tie-up. We have done a tie-up. And we anyway use all the equipment for a lot of our value chain to ensure that there is absolutely no contamination. And they themselves have also innovated and come out with a more, let's say, smaller device, etc., which can be deployed in stores. So we are going to experiment with some of this in some of the cities and see what it yields. And we are also anyway separately testing out other competition and other jewelers' products to see how much is truly natural, how much is mixed, etc. So all that work is on. But good idea. We'll consider your thoughts. Are you seeing on-ground adulteration going up in general? I don't have data for that right now. It's too early. We have started doing some studies, but very interestingly, on gold, on a side note, even today we get two, three carats below the 22-karat in our exchange program, and it surprises me knowing in certain markets it goes down by even a few more carats, so even after so many years of hallmarking and so many years of doing it, we still get very low carats in our gold itself. Okay. That's interesting. Okay. Perfect. Thank you. Thank you. The next question is from the line of Rahul from Envision Capital Services. Please go ahead. Sorry, can you take my question? Can't hear you. I'm audible? Rahul, please go ahead with your question. Am I audible right now? Yeah, yeah. Yes. Yeah, yeah. Thank you so much for taking up my question. So in the last quarter, we have data that you will be there with your expansion plan of this Tanishq Mia and the CaratLane stores actually. So could you provide an update about the store expansion plans, especially how many Tanishq Mia store CaratLane stores have been adding Q2 and are you driving on track to meet the year-end target? So it would be kind of interesting if the data is handy. Sure, sure. So we've added in Tanishq 22 stores. In fact, in this month itself, in October, we've added another 10 or 11 stores rather. We have added 33, therefore up to 30th October. And our aim is to add between 40 to 50 depending on finding the right property, etc., etc. And typically that's what we've added. Mia is also likely to reach 250 by the end of the fiscal. On CaratLane, Venkataraman will share. Yeah. As far as CaratLane is concerned, we very recently crossed a milestone of 300 stores. Currently, it is 301. Net addition is 29 for the year, and we hope to add another 20 before March. Okay. Okay. Thank you so much. Thank you. The next question is from the line of Ashish Kanodia from Citi. Please go ahead. Yeah. Thank you for the opportunity. So the first question is on the competitive intensity. So given the steep increase in gold price, if you can highlight how the regional and local players are behaving, are they kind of giving some offer on the gold price? Because we also noticed Tanishq was offering discount on the gold price for the first time and post the discount, the gold price was matching the gold price of some of the other large players' offers. So that is the first question. Yeah. You're right. The competitive intensity on gold rates itself has gone up thanks to very high price of gold. And many, many local players have been either on their own or sometimes in response to other national players or chains come out strongly with gold price offers. And this year we saw many players do that. So we also decided to play it a little differently and ensured that our discount payouts during the festive season was smartly distributed between making charges and gold rate and other offers that we do. So psychologically, it helped the customer kind of feel a little bit more comfortable. But we still manage the payout in a manner that we look at them in totality and therefore it's not just a flow-through. So instead of more discounts, part of the discount was routed through lower gold prices. Is that the right understanding? Yeah. And what also it helped interestingly is during festive, the exchange became even more attractive because people bring in their old gold at a certain rate and then this is a discount, not the gold rate per se. So it actually means they gain in their mind, they gain a lot more by bringing in old gold. And we wanted people to do a lot of that. So we ran a Festival of Exchange as well during this period and this played to that. Sure. So that's very helpful. The second question is just going back on the LGD part. You have seen over the years how CZ or ADs have kind of instead of becoming jewelry, it basically ended up being just fashion accessories, right? So any learnings from that or anything? I mean, maybe when AD was ramping up in India, we were in a very different zone. But any similarities or difference you see when ADs or CZ was scaling up and now when LGD is scaling up? And second, given what say Westside has done and maybe some other players are also doing, do you see ultimately lab-grown diamond just fading away as accessories rather than really replacing it as jewelry? See, the first thing is that certainly LGDs are far superior to ADs in any other form because optically, chemically, physically, they mimic that they are diamonds in a sense, right? And they're just grown in the lab. So to that extent, to compare them with AD is perhaps not right. The other thing is finally the sustainability side of LGD is also an angle which is being brought in and all that. So I won't compare it like that, but we like to actually see the way it plays out in the next many years because it's not easy to predict how it will actually go. And your second part, what was it to do with the Westside? My point was because if you are getting a LGD in a big box retailer, as a consumer, you will not necessarily see it as a jewelry, right? It ultimately becomes fashion accessories. Correct. So that was the point I was making about why Westside is choosing to do it like this and how it does not really impact on whatever we may do. Also, what we have heard and seen, Pandora and Swarovski have gone into that space and how they shape that category and how it does and of course, price is coming down. So you could be right, but really very difficult to put a forecast on that. Sure. So this is super helpful. Just one last bit is on the customs duty impact. So last quarter, I think you called out that the total impact could be maybe between 500-550 crores. And given that the gold prices have actually moved up, my understanding is the impact could be slightly lower than that. So is it significantly lower to call it out separately that instead of 550 crores, the total impact could be lower? No, no. Actually, that was an estimate, of course, at that point of time, and gold prices going up have a very, very little impact on that, so actually, our current estimate, which is much more formal, is that quarter three may witness about 275-280 carat kind of number. Sure. So this is super helpful. Thank you so much. Thank you. Next question is from the line of SM from Mehta's Family Office. Please go ahead. Good evening, sir. Thank you for giving me this opportunity. I have one question with regards to lab-grown diamonds. In the past, we have seen something in the pearls. Now, pearls were considered as precious and luxurious jewelry. But however, pearl farming changed the entire situation, and thereafter the pearl lost all its charm. Is lab-grown doing the same to the mined diamonds? Your guess is as good as mine, to be honest. And frankly, it's very difficult to predict what will happen. I mean, if you look at what happened in the U.S. And yeah, I mean, so it's very difficult to gauge. We've also had that in emeralds. We've also had that in this. But that same trend didn't play out like it played out in pearls. I don't know. Emeralds continue to be natural emeralds, and rubies continue to be very important. Got it, sir. Thank you. Thank you. The next question is from the line of Swaroop from KRC. Please go ahead. Thanks for the opportunity, sir. So just wanted to have your thoughts on, so with the rising gold prices and lack of commensurate pricing increase in diamonds, which has been falling, do you see the rise of 18-karat and below kind of jewelry to make the products more in terms of most of the jewelers, making those products affordable as well as maintain their margin for the standard jewelry? This could be a trend we could see as we move ahead? You're asking only for studded? Yes, studded, yeah. Largely for studded, sir. Because that's how you will make the jewelry more lighter as well as the mix for your diamond and gold mix could be the proportion in terms of value could be maintained. This is Saumen from CaratLane. There is actually enough evidence, especially in the northern region and the western region. The high-value jewelry of diamond has moved to 14-karat. It has happened over a period of time, and it is actually a substantial segment of the higher end of diamond jewelry. So typically, also I'll clarify, most of studded jewelry has been in 18-karat. There is a small segment of 22-karat studded jewelry only in the south, which is a closed setting, which is called. That continues to be what it is. And 14-karat is the other bit which, in fact, all of Mia's most of Mia's 14-karat and a good part of CaratLane is also 14-karat. And now what Saumen mentioned, so whether 18 will become 14 as we go forward for the bulk of the market is difficult to say because there are enough people who say, "If I'm buying a diamond jewelry," and especially if it is in the five lakh plus eight lakh plus, in certain markets, they are okay. If it is 14, in many markets, they are saying, "No, it has to be 18." So it's not a very clear trend. It's a mixed bag. But yeah, what is the customer segment? Like the point that Ajoy was making about emeralds, there is something to be said. 18-karat is closer to it being pure in a sense. And therefore, when I'm buying something expensive, exquisite, I'd rather have that. It's partly psychological, partly color and all that. So we are so much into 18-karat diamond jewelry and not 14. But we just, yeah, to share with you, we keep experimenting in different markets, and we keep learning from it. And there is a geographic preference difference that Saumen also pointed out. Yes. Just a quick question. When you highlighted there is a price fall in the solitaire, how does it work for the smaller diamonds which we use for studded jewelry? How has the pricing been there? While you may not, while selling, you may not be explicitly mentioning that. But from your buying perspective, those diamonds, how has the pricing been? Pricing has been fairly stable. In fact, it has gone up post the Ukraine war because of Alrosa sanctions, etc., and therefore, there was a certain shortage of supply. Thereafter, it's been pretty stable. There will always be deals going on here and there. In fact, we have not seen any softness in that price in the smalls. Though Rapaport keeps publishing all kinds of data, but at the very small ones, their data reports are not really relevant. It's mostly in the solitaires where their reports are relevant, so it's stable, I would say. Just a quick clarification, you highlighted that you expect around INR 280 crores of inventory loss because of customs duty. Is this included in the margin guidance? No, margin guidance is always normalized. We have always clarified that this is a one-time event. Margin guidance is normalized guidance. So you have to account for adjust this INR 280 crores in quarter three. Understood, sir. Thanks a lot, sir. And all the best for the coming quarter. Thank you. Thank you. The next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Yeah, thanks for taking my question. So first question was actually just in connection to the previous question. So what was the key reason for the EBIT margin improvement for CaratLane this quarter, and should we expect the trend to continue to improve? Yes, Saumen, would I hear? Hi, this is Saumen. Part of the reason is about the sales growth that has been significant. The second reason is also we have been able to hold the studded margin, and there has been also some margin regain that would have come through the price of procurement, etc. All these three are the cost front. I think we have managed to contain our cost. All put together, we would have seen about 1% plus delta over last year, and it is expected to be better. Okay. Understood. And second, Ajoy, for you, historically, you have guided us in terms of what the gold exchange for Tanishq jewelry as well as non-Tanishq jewelry has been. So if you could update us on that number for this quarter. And additionally, if you can tell us if there is a similar number which we have with respect to diamond exchange, and if we have that number for this quarter, it will be very helpful. I don't have a number for diamond exchange, though it is an integral part of the number which I've historically given. First, on the gold exchange, which is non-Tanishq gold, this quarter, we saw a lower gold exchange, probably because I suppose people saw a bull run on gold and wanted to hold on to gold as much as they could. So it's 3 percentage points lower contribution than usual. That's what it looks like. But if I discount the sale of coins because that is like buying coins, then it's a very marginal drop in contribution. Okay? So then it's only a 1% drop in contribution. So it could be a very temporary quarter to specific phenomena. And in Tanishq exchange, a significant part, not immaterial part, or a material part of it, comes also from solitaire exchange. That has certainly reduced, especially at the higher end. I don't have a number to give you on that, so I'm not able to share with you. But still, ballpark, we are in that 8-9%, sometimes it may swing to 10%, maybe 8% or 9%. I don't have an exact figure right now. If I may ask, can a customer who owns diamond jewelry, a studded diamond jewelry or a solitaire, can they exchange it for gold jewelry? I mean, is that okay? Yeah, yeah. Okay, and just one final question with respect to inventory. I mean, you attributed the customs duty-related inventory loss, but will we have any inventory loss with respect to solitaires in the upcoming quarter? No. No, no. All right. Thank you very much. Thank you. Ladies and gentlemen, this was the last question for today. I now hand the conference over to Mr. C. K. Venkataraman for closing comments. Thank you very much, everyone. So like I started, it's been a very satisfying quarter for us from a growth point of view. And across businesses, it's been quite satisfying. We've already spoken about the jewelry and the analog watch business. And just spending a minute on the analog watch business, I think what the team has done and the division has done is actually focused substantially on product innovation, retailing, branding, and premiumization. And we expect to push the envelope on this and continue this growth trajectory for many, many, many years because this is actually a product with limitless appeal. So that's one long-term comment on watches. As far as eyecare is concerned, there was no question, but I want to clarify. I want to tell you that the strategy that we started executing about eight, nine months back continues to be in full swing. And the customer acquisition rate continues to be at a very satisfying level. People are so excited about Titan Eye+'s offering products, affordable fashion on the one hand, affordable progressive lenses on the other, premium frames and sunglasses on the third. So across the spectrum, we're delivering exceptional refined product value and building a solid foundation of growth over the next many quarters. And you'll hear about all those and the results in the quarters to follow. The foundation of Taneira has become stronger and stronger and stronger. And we expect certainly FY26 to be a sort of blockbuster year for Taneira. We aim to take it to its rightful place in the ethnic wear industry and make it a very prominent, very respected name in that market. We are an established name in the perfumes business and doing very well in H1. The first exclusive brand outlet of IRTH was launched in October. It's a fabulous store. All of you who live in Mumbai, please go to the Palladium Mall and take a look at this, an idea which is waiting to explode. You'll see the explosion of that across the country over the next many months. Combined with the omni potential for that category, we aim to make a big mark in the organizing, formalizing, right-serving of that category as well. The international business continues to be on a roll. First half, as well as the October season, were very, very exciting with opening stores by and large as per plan. Everywhere hitting the ground running to exceptional customer acclaim. Even the engineering business, as one of the investors had messaged me about a week back, is also doing very well. So overall, the portfolio of Titan Company is in a very, very good place. And thank you very much for all the support and confidence that you have put on us over the years. And we hope to keep you delighted in the quarters to come. Thank you very much. Thank you. On behalf of Titan Company Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the line.