“We would not be rushing our expansion because we are still a diamond-centric retail outlet and we will go by our experience,” said Saumen Bhaumik, CEO and managing director of CaratLane. “There’s a very robust system based on how many people search for us, how many orders we get. Plus, we also started physical roadshows. All of these help us decide which are our next markets. I think about 40 to 50% of the stores will probably be in the existing cities.”
The retailer’s total income increased 23% year-on-year to ₹883 crore in the March quarter. Revenue from the studded category rose by 19%, while all other categories (gold jewellery, gold coins) collectively grew 44%.
Buyer growth came in at about 5%, according to Titan’s March quarter earnings release. For the full year, total income grew 24% to ₹3,583 crore.
CaratLane added a net 17 stores in India during the quarter, bringing the total store count to 322 across 139 cities. For the full year, it added 50 stores, in line with the number added in FY24.
The retailer has faced challenging months since December because high gold prices spooked consumers. Demand may improve over the coming months, but recovery will be gradual, Bhaumik said.
“We had a relatively poor December i.e. after the wedding season. But we did a few things and as a result, January and February, we actually saw growth in excess of 30%, which was pretty good, given the circumstances. March was a flattish month. We also wanted to use the month of March to prepare for the next 12 months,” he said.
During the quarter, the company launched a Valentine’s Day collection with pieces starting as low as ₹3,999 for 9-carat gold ornaments.
High gold prices
Gold prices surged earlier this year, reaching ₹1 lakh per 10 grams. While the company sells diamond-studded jewellery and solitaires, high gold prices impact consumer sentiment, Bhaumik said
“Gold price hikes do take a hit on sentiment,” he said. “Indulgence (purchases) comes under pressure, therefore we need to continue to be truly affordable… While gold does influence sentiment—our life gets a little less affected. The first thing that comes to my customer’s mind is that diamonds are not an investment, unlike gold. People buy and wear it forever,” he explained.
Al Cook, the CEO of global diamond trader De Beers, recently suggested that India’s diamond market – estimated at under $10 billion currently – could double by 2030. Bhaumik said that less than 10% of jewellery consumers in India currently buy diamonds.
“There is a huge amount of headroom for diamonds in India. With the overall exposure, orientation towards adornment and self-gifting and so forth, my sense is that in India, diamonds could grow and grow for a significant amount of time,” he said.
The retailer draws 90% of its business from stores.
Impact of competition
Titan first acquired a 62% stake in the then-online retailer for ₹357.24 crore in 2016, making it a subsidiary of the company. In 2023, it increased its shareholding in CaratLane Trading Private Ltd to 98.28% from 71.09%, paying ₹4,621 crore for the additional stake. Titan’s Tanishq is among the largest gold jewellers in India.
Bhaumik said the company has no plans to enter the lab-grown diamond market, which has emerged as formidable competition to natural diamonds.
“Would it keep the diamond market unaffected? I don’t think so. But net-net, natural diamonds will probably have a longer lasting lifeline than we were currently talking about. My view is the diamond industry will grow,” he added
Bhaumik said that while there will never be enough retail stores to address a country of India’s size and spend, online shopping would also continue to play to its advantage.
“We are also pressing the button on growing online significantly,” he said.
