Today we’re breaking down India’s largest jewelry business, Titan. Titan began life as a watchmaker in 1984 through a joint venture between India’s biggest conglomerate, Tata Group, and the Tamilnadu state government. Today, the vast majority of its $4 billion in revenue come from its collection of jewelry brands, and Tanishq in particular.

To break down the business, I’m joined by Saurabh Mukherjea, the founder and Chief Investment Officer of Marcellus Investment Managers. We cover the importance of jewelry to Indian consumers, the intricacies of retailing across India, and how Titan stands head and shoulders above its competitors in terms of profitability. Please enjoy this breakdown of Titan.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

(00:02:45) - (First question) - What Titan is, where it operates, and its size and scale

(00:06:50) - The bulk of the demand when it comes to Indians buying gold 

(00:08:24) - Getting their start in watches in the 80s and evolving into what Titan is today 

(00:14:52) - What a typical Tanishq store looks like and overview of store economics

(00:18:58) - How their return profile is changing and what types of stores they want to open

(00:23:51) - What gold on lease is and the implications of it for their business model 

(00:25:33) - Why make jewelry when they could just be selling gold for savings purposes

(00:27:36) - Managing inventory and keeping costs under control at the store level

(00:31:54) - Whether or not they have artisans spread out across the country and difficulties of shipping and freight at their current scale in India 

(00:33:38) - How they’re attracting customers to stores and store-level marketing strategies

(00:37:57) - Splitting their business into middle class, premium, and wedding jewelry 

(00:39:22) - Where e-commerce figures into the scope of their business

(00:42:47) - Thoughts and philosophy on allocating surplus capital and acquisitions 

(00:45:38) - Additional competitive advantages Titan has

(00:48:42) - Building brand trust in a low trust economy in such a short time period 

(00:50:22) - Where future growth will come from and if they can sustain their current growth rate

(00:54:04) - The bull case for their business and what a Saree is

(00:57:03) - Risks the business faces as they look out at the future 

(01:00:12) - What he’s learned as an investor studying Titan’s business