Welcome to our presentation

VERSATILE
Imroz Mahmud Pongkaj Sharma Lamia Hossain Nabila Rahman Gobinda Ghosh

Our Topic

The surging spirit of India !

Introduction
Remember when the only Indian wristwatch brand you could buy came in a clutch of clunky models, one more ordinary than the other. When the craze for an `imported watch never seemed to wane? That was before the time of Titan, a name which changed forever the way watches made in this country were seen by Indians and the world.

Titan Industries
Pioneer. Breaker of rules. Leader in two businesses:premium and mass market. Manufacturer, designer, brand owner, marketer, retailer and after-sales service provider. Unique culture. First company to dare to challenge the Swiss. B2C and B2B player. One of the Jewels of the Tata Group.

About Titan
Titan is the worlds fifth largest, integrated manufacturer-brand for watches. Key people: Xerxes Desai, Founder (India). Commencing production in 1986-87, the Company is today the leader in the Watch & Jewellery businesses in India.  First & largest player in the branded jewellery segment (Tanishq).  >60% share of the organized watch market.  Over 90 million watches sold across 30 countries, cumulatively.

About Titan
Manufacturing Facilities:  Main Watch & Jewellery plants in Hosur near Bangalore (India s Silicon Plateau ).  Watch assembly plants at Dehradun, Baddi, and Roorkee. ECB plant in Goa; Jewellery making facility at Dehradun.  Investment of US$150 million in 450,000 sq.ft. state-of-the-art manufacturing facilities. Over 3,000 employees. Owned by Tata: 25.17% and TIDCO: 27.88%. Professionally managed by TATA group & an independent Board.

Mission
To create wealth for all our stakeholders by building highly successful businesses based on a customer-centric approach, and to contribute to the community.

Vision
To be a world-class, innovative and progressive organization and to build India s most desirable brands.

Values & Standards

Total customer orientation: Customers take precedence over all else, always. Employee appreciation: We value and respect Titanians and endeavors to fulfill their needs and aspirations. Performance culture and teamwork: At Titan Industries, high performance is but a way of life and is nurtured by teamwork.

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Values & Standards

Creativity and Innovation: Driven by innovation and creativity, we focus on smarter approaches and newer technologies. Passion for excellence: In all our pursuits, we ceaselessly strive for excellence. Corporate Citizenship: We ensure that a part of our resources is invested in environment and community betterment.

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Recognition and Awards in many categories

Indias most admired consumer durables company having the most trusted brand in India -TITAN. Both TITAN and TANISHQ adjudged best retail brands in IFF survey JRD QV (Malcolm Baldrige) Award in 2006 to the Watch Division followed by Industry Leader Award in 2009. Jewellery Division received Emerging Industry Leader Award also in 2009. ET and Great place to work survey selects Titan as best employer in Retail and among the top 25 nationally President of India Award for best employer of the physically challenged.

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Titan s businesses
Watches Jewellery Eyewear Precision Engineering Currently Marketing our Products in 26 countries with a larger footprint in the Middle East and Asia-Pacific regions

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I) Watch Business

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The Watch Market & Industry in India

India is an under-penetrated market for watches only 27 % of Indians own a watch Total estimated market in 2008-09 Volume ~ 43.5 mn units & Value: Rs 3000 Crores (USD 600 Million) Vast proportion of the Indian market is below Rs 500 ~ 68% (85% by volume) Market has been split into: Low end, Mass market, Premium, Luxury

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Watch Market Map

Formal / Classic
Raymond Weil Tissot Sonata, HMT, Maxima TITAN Citizen Omega,Rado, Longines

Nebula

XYLYS

Price
Rs 500 1000 2000 4000 5000 10000 30,000 +

Timex

Fastrack

Espirit, Swatch Fossil Giordano, DKNY, Carrera Tommy Hilfiger

Fashion/Sporty

Tag Heuer Hugo Boss C Dior

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INTERNATIONAL BUSINESS
One of Indias first companies to market a consumer brand overseas. Now present in 26 countries outside India. Among the top 3 brands in some Asian countries. Selling over 675k watches annually with increasing presence in jewellery. Total export sales of over Rs 130 crores in 2008-09.

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II) Jewellery Business

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Jewellery Market & Industry highlights

Size of market: Rs 80,000 crores (~ US$ 16 billion) Urban market is about 38% of this base

Market

Branded jewellery is less than 10% of the overall market Importance of jewellery to Indian consumers Gold is seen as auspicious, an investment, for adornment. Product mix: largely plain gold 22kt, with gem set jewellery constituting less than 10% of the market

Key players: Fragmented market, mainly retailer driven.

Players

Most retailers are unorganized and stand alone Absence of hallmarking Tanishq - the first branded jewellery player (1996) Increased investment by industry bodies (DTC, PGI, WGC) is spurring rapid growth of the branded jewellery market in India

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TANISHQ TODAY A BRIEF OVERVIEW

Strongest and most aspirational brand in the jewellery category Awarded most admired brand and Retailer of the year by Images Fashion Enjoys a market share of over 40% in branded jewellery

Brand

Network

Indias only national jewellery retailer 115 stores in 70 towns prime high street locations Many of these stores are run by franchisees

Customer Base

Over 1.5 million customers shopped at Tanishq last year

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Gold Plus :Size of the opportunity

Semi-urban and rural market estimated to be as much as 40% of the total : Over Rs 30,000 crores. Value conscious consumers, buying traditional jewellery Very fragmented industry with under-karat age still prevalent in many parts of the country A new business model and a new brand to exploit this opportunity Sales of Rs 95 crores in 2006-07,Rs 200 crores in 2007-08 and Rs 390 crores in 2008-09 30 outlets as at 31 March 2009
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III) THE EYE WEAR BUSINESS

Started in 2004-05 by marketing Sunglasses under the Fastrack brand. Targeted the youth segment. Pilot project for Prescription Eyewear started in March 2007. Achieved a sales turnover of over Rs 66 crores in 2008-09 up from Rs 40 crores in 2007-08. 70 Titan Eye+ outlets as on 31 March 2009.

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IV) Precision Engineering Business

The Opportunity
India growing as a manufacturing base for precision products across industries. Large & growing market: The global market for precision engineering products addressable by Titan is Rs.135,000 cr.

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Recent Products

Upper Head SS Schlumberger

End Cap SS Schlumberger

Centraliser AMS Grade Steel 17-4 PH Schlumberger

Filter- AMS Grade Steel Schlumberger

Index Pin Titanium Schlumberger

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Titan s Brands
TITAN SONATA FASTRACK XYLYS TANISHQ GOLD PLUS TITAN EYE+ ZOOP!
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Our businesses
B2C businesses: Products B2C businesses: Retail

Premium

1 store 2,700 sq ft

2 stores 6,700 sq ft

Midpremium
Fastrack accessories

273 stores 2,50,000 sq ft 115 stores 2,25,000 sq ft 7 stores,3500 sq ft

77 stores 68,000 sq ft

Mass

30 stores 48,000 sq ft

Watches

Jewellery

Others

Watches

Jewellery

Others

+
B2B businesses: PED and MBA

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Areas of Service
Titan serves 4 continent and 32 countries, including India and other countries especially Middle east, Asia Pacific and Africa. To seize every opportunity, Titan has a lot of retail networks.

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Organized Retailing
Seize the Opportunity!

Our retail network, now comprising of 273 World of Titan stores 115 Tanishq stores 30 Goldplus stores 2 Zoya stores 1 Helios store 4 Fastrack Kiosks 7 Fastrack stores 10 Sonata stores 77 Titan Eye+ stores ...accounts for Rs 3000 crs of annual sales making us India s largest specialty retailer.
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Wrist Watch
Titan brought in quartz technology, displacing the mechanically driven HMT. Every Titan watch is a compass to finding a 'new you' within you. It embarks us on a journey that never ceases as there is always a new destination to explore as soon as you reach one. That s why Titan s philosophy is 'Be More .

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Marketing strategy is the marketing logic by which unit expects to achieve its marketing objective. There are some important parts of marketing strategy, they are:
SEGMENTATION: Segmentation is the process of dividing a market into distinct group of buyers. After carrying out an in-depth market study, Titan identified 3 distinct market segment. Which are: 1. # The first consisted of the high income/elite consumers 2. #The next segment consisted of consumers who preferred some fashion. 3. #The third segment consist of the lower income consumers

MARKETING STRATEGY

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MARKETING STRATEGY
DIFFERENTIATION: Actually differentiating the market offering to create superior customer value. By offering customers quality product the blended classy designs with superior technology, Titan became byword for success stories PRICING METHOD: Titan goes in for the mark up pricing strategy. The Titan product carries a maximum retail price on it. n the recent past Titan has also used the PERCEIVED VALUE PRICING to its advantage.

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Target marketing
Titan s products have come down from being a rich man s watch to that of everybody s watch. It has product for all categories. For Example: FAST TRACK Category Aimed at: Youth. EXACTA Category Aimed at: Lower Middle Class (Office Wear). SPECTRA Category Aimed at: Common Class. ROYALE Category Aimed at: Upper Middle Class.

NEBULA
Category Aimed at: Upper Class.
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Advertising & Sales Promotion

Titan believes in making its ads clean, well made, touch an emotional chord, convey the message, have catchy jungles and make an impact. Titan is one of the companies which formally believes in the policy of promotion the product based on the occasions of the calendar. With every occasion having a special memory attached to it exploits this memory aspect and pushes its products. To change watches in line with the clothes is a promotion strategy of Titan introduced by Amir Khan (Brand Ambassador of Titan).

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COMPETITORS TO TITAN
HMT RADO CASIO SEIKO ESPRIT CITIZEN SWATCH CARTIER GIORDANO LONGINESS MAXIMA QUARTZ IMFQ-INDIAN MADE FOREIGN QUARTZ FASHION HOUSES DKNY, GUCCI, ADIDAS, NIKE, BVLGARY

But, Titan s portfolio comprises of products from Rs.295 Rs.45000. Many competitors do not go beyond a certain range or do not come down Below a certain range.
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Financial Analysis
2008-09 continued growth despite the slowdown
Financials  Company Income crossed Rs 3750 Crores (US$ 750 million)  PBT crossed Rs 230 Crores (US$ 46 million) Brands  Brand Tanishq crossed Rs 2370 Crores (US$ 475 million)  Brand GoldPlus crossed Rs 390 Crores (US$ 78 million)  Brand Fastrack crossed 1.50 million watches Retailing  World of Titan stores crossed 250  Tanishq and GoldPlus outlets touched 150 New Business  Titan Eye+ outlets reached 70 (from 10)
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THE THREE YEAR JOURNEY

INCOME
Watches 1000
Income in Rs. Cr.

Jewellery
877 908

Company
276

3000 2500
Income in Rs. Cr.

4000 3500
2995

3808

800 600 400 200

738

2027
Income in Rs. Cr.

3000 2500 2000 1500 1000 500 0

2006-07 2007-08 2008-09

2000 1500 1000 500

1292

2092

0
2006-07 2007-08 2008-09

0
2006-07 2007-08 2008-09

Year

Year

Year

4%

36%

27%

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THE THREE YEAR JOURNEY

CAPITAL EMPLOYED
Watches 400
338 3 7
00

Jewellery
360

Company 800
6
592 719 745

400 300
i Rs. Cr.

300
in Rs. Cr.

600
186
in Rs. Cr.

200 100 0
2006-07 2007-08 2008-09

200 100 0
2006-07 2007-08 2008-09

400

Year

200

0
2006-07 2007-08 2008-09

Year

Year

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THE THREE YEAR JOURNEY

COMPANY PROFITABILITY
PBT 250
0 31

PAT 250 200

150 159
in Rs. Cr.

200
in Rs. Cr.

150 100 50 0

13

150
94

100 50 0

2006-07

2007-08

2008-09

2006-07

2007-08

2008-09

Year

Year

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2008-09 Summarized Results

(Rupees in Crores) Sales / Income from Operations Less : Excise Duty Net Sales / Income from Operations Add : Other income Net Sales / Income from Segments Profit before interest and taxes Less : Interest Profit before taxes Less : Taxes for the year Taxes of prev ious years Net profit after taxes Watches 946.19 39.22 906.97 1.52 908.49 137.86 Jewellery 2760.23 2760.23 2.97 2763.20 164.40 Others 141.3 5.12 136.18 0.11 136.29 -24.11 Corporate 0.66 0.66 -18.16 Total 3847.72 44.34 3803.38 5.26 3808.64 259.99 29.43 230.56 60.68 10.92 158.96

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2009-10 PERFORMANCE FIRST QUARTER

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2009-10 : Q1
Watch revenues and results were positively impacted by the improved product mix from higher sales of Fastrack and Titan watches (due to wedding season) and the successful re-launch of Sonata after completion of the planned down-stocking in Q4. Jewellery sales were impacted by the high Gold prices. Sales increased by 3% in value terms, but with a Gold price increase of almost 20% the volume de-growth of Q4 continued in Q1. Results were also impacted by the adoption of AS 30 and inventory valuation by FIFO. The Eyewear chain grew from 69 to 77 outlets and the Company continues to invest in this business which will continue to grow and break even only by 2012. Precision Engineering made a small loss due to deferral of deliveries at the request of several customers. It is expected to break even once again, by Q2.
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PERFORMANCE INCOME
Watches
500 400
Income in Rs. Cr.

2009-10

FIRST QUARTER

Jewellery
1000 800
Income in Rs. Cr. Income in Rs. Cr.

Company
1000
810 888

800
1 3 4

657

300 200 100 0

2007-08 2008-09 2009-10

600 400 200 0

600 400 200 0

2007-08 2008-09 2009-10

169

17

09

2007-08 2008-09 2009-10

Year
21%

Year
3%

Year
9%

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PERFORMANCE

2009-10

FIRST QUARTER

Watches (EBIT)
70 60 50 40 30 20 10 0 70 60 50 40 30 20 10 0

e e er (EBIT)

Company PBT)
70 60 50 40 30 20 10 0
64 44 25

51 35 25
PBT in Rs Cr

PBT in Rs Cr

9 11
PBT

17

2007-08 2008-09 2009-10

Cr

2007-08 2008-09 2009- 0

2007-08 2008-09 2009-10

Year +70%

Ye r +45%

Year +43% 45

PERFORMANCE 2009-10 FIRST QUARTER CAPITAL EMPLOYED (END JUNE)

Watches
800 700 600 500 400 300 200 100 0

e e er
800 700 600 500 400 300 200 100 0 800 700 600 500 400 300 200 100 0

Company
760 579 6 2

in Rs. Cr.

353 292

349

254 1 9

278

in Rs. Cr.

. Cr.

2007-08 2008-09 2009-10

2007-08 2008-09 2009- 0

2007-08 2008-09 2009-10

Year

Ye r

Year

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Future Plan
2009-10 Turnover to grow by about 20% over previous year (at constant gold prices), to target Rs 4,600 crores. Operating Profit to grow in similar fashion. Continued retail network expansion.

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The last five years saw a three-fold growth.

5000 4000 3041 3000 2000 1000 0 2005 2006 2007 2008 2009
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3848

2136 1481 1135

Income in Rs Crores

 and in t e next fi e ears e US$ 2 billion company !

ill become a

m in r r

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CONCLUSION
In the Journey from being a watch manufacturing unit to the watch leader in the industry the journey to the 50 million watch mark has just shown the METAL of which Titan is made of. In this MEMORABLE TRANSFORMATION Titan has at every step taken FULL `N FULL care of each person that entered its 50 MILLION STRONG FAMILY which has made it possible to be what it is today.

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Further information is available on www.titanworld.com

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THANK YOU

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