SENCO delivered consolidated revenue growth of 27% YoY to INR21.0b (in line) in 3QFY25, with an SSSG of 16%. The growth was driven by strong festive demand, and the healthy demand trend continued into Jan’25.

Titan's domestic jewellery business revenue growth continued to be strong (~25% YoY; LFL: 22% YoY) driven by gold jewellery with good performance in studded segment (+21% YoY, strong buyer growth in sub-100k price point) while solitaire segment continued to be muted (global price uncertainty), leading to ~100bps (~23%) reduction in the studded share.

Titan's domestic jewellery business revenue growth had a strong revival (~25% YoY; LFL: 15% YoY) driven by improved industry demand conditions.

Titan's domestic jewellery business had an abnormally weak quarter (LFL and revenue growth of 3% and 8% YoY respectively) due to external headwinds of steep gold price inflation.

Jewellery segment revenue growth was healthy (21% YoY, 27% YoY secondary, 22% like-to-like), led by benefit from shift in ‘Shraad’ from 2Q to 3Q. This also need to be seen in the context of ~16% YoY inflation in gold price and 10% YoY retail expansion.

We are surprised at consensus' surprise about Titan's Jewellery margin glide path. We reiterate our view - Tanishq needs to reduce price premium (on gold, on making charges) to drive growth (see reports - link 1, 2). In 1QFY24, revenue growth in Jewellery at 19% YoY (22% SSSG) was healthy but must be seen in the context of 10% YoY retail expansion and 17% YoY inflation in gold price.

Titan continues to achieve new feat, recording stellar growth in Revenue of 25% YoY (Standalone) at ? 8,553 Cr with a 3 year CAGR growth of 25.1%. The Jewellery segment witnessed a robust Total Income growth by 24% YoY at ? 7,576 Cr along with domestic operations increasing by 21% YoY on the back of strong wedding season with over all high retail sales growth.

The rise in (relative) competitive intensity in jewellery retailing led to melting-away of gold-rate premium charged by category leaders (vs historically) compared to competition. We observe that in key cities (top 9 cities which contribute ~30-35% of Tanishq’s total retail area), (1) premium charged by Tanishq has declined by ~50% (to 1-3%) from historical levels.

Jewellery segment continued to outperform with 20%+ 3-year revenue CAGR in 9MFY23. SSSG at 9% is encouraging, driven by higher buyer growth (now at 49% vs 48% in Q2FY23) while growth in ticket-size has been moderate.

We believe that Tanishq has effectively fine-tuned the success template in Chennai / Tamil Nadu, which we believe is a replicable template on other southern states.