INVESTOR MEET – 3 August 2007: INVESTOR MEET – 3 August 2007 Bhaskar Bhat Managing Director Titan Industries Limited ‘Delivering value by creating desirable brands’


Disclaimer: Disclaimer Certain statements are included in this release which contain words or phrases such as “will,” “aim,” “will likely result,” “believe,” “expect,” “will continue,” “anticipate,” “estimate,” “intend,” “plan,” “contemplate,” “seek to,” “future,” “objective,” “goal,” “project,” “should,” “will pursue” and similar expressions or variations of these expressions that are “forward-looking statements.” Actual results may differ materially from those suggested by the forward-looking statements due to certain risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to implement our strategy successfully, the market acceptance of and demand for our products, our growth and expansion, the adequacy of our allowance for credit to franchisees, dealers and distributors, technological changes, volatility in income, cash flow projections and our exposure to market and operational risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what may actually occur in the future. As a result, actual future gains, losses or impact on net income could materially differ from those that have been estimated.   In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this document include, but are not limited to: general economic and political conditions in India and the other countries which have an impact on our business activities; inflation, unanticipated turbulence in interest rates, foreign exchange rates, the prices of raw material including gold and diamonds, or other rates or prices; changes in Indian and foreign laws and regulations, including tax and accounting regulations; and changes in competition and the pricing environment in India. The Company may, from time to time make additional written and oral forward-looking statements, including statements contained in the Company’s filings with SEBI and the Stock Exchanges and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company, to reflect events or circumstances after the date thereof.


Slide3: Titan Industries A Happening Company in a Happening India !


Titan Industries: Titan Industries Pioneer Breaker of rules Leader in two businesses:Mid and mass market Manufacturer,designer,brand owner,marketer , retailer and customer service provider Unique culture First company to dare to challenge the Swiss B2C and B2B player Will be in at least FOUR businesses Pride of the Tata Group


Slide5: Demographic Needs Effect Enablers Outcome Consumption of Lifestyle Items CONSUMERISATION OF URBAN INDIA Rising % of young Population Increase in Income levels Changing Spending pattern Increase in Number Of working women Increase in Spending power Rising Aspiration levels Organised retail market at Rs.97000 Cr by 2010 (CAGR 31%) Increase in Number working urbans


Our Heritage – the TATA Group: Our Heritage – the TATA Group Titan is a part of the TATA group having a turnover of > USD 29 bn, equivalent to over 2.5% of India’s GDP and having the biggest market capitalization The Tata group is India’s largest employer in the private sector – 222,000+ employees across 85 companies The TATA group has achieved many Firsts for India: First private sector Steel mill First private sector Power utility First luxury hotel (Taj), First Airline (now Air India) India’s largest software company (TCS) India’s largest watch & jewellery mfgr (Titan)


About Us: About Us Titan is the world’s sixth largest, integrated manufacturer brand for watches 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 organised watch market Over 90 million watches sold across 30 countries, cumulatively Manufacturing Facilities Main Watch & Jewellery plants in Hosur near Bangalore (India’s Silicon Valley) Watch assembly plants at Dehradun, Baddi, and Roorkee. ECB plant in Goa; Jewellery Plant at Dehradun Investment of US$130 million in a 450,000 sq.ft. state-of-the-art facility Owned by Tata:25.17% and TIDCO:27.88% Professionally managed by the TATA group & an independent Board


Recognition and Awards in many categories: Recognition and Awards in many categories The Watch Division won the coveted JRD QV (Malcolm Baldrige) Award in 2006. India’s most admired consumer durables company having the most trusted brand -TITAN. Both Watches and Jewellery adjudged most admired brands for the last 4 years. Also adjudged Retail Company of the year. Retail Asia and Media Award-Singapore, for Retailing and preferred brands. Ideator Awards for Titan designers. Best Corporate Citizen – Mother Teresa, Helen Keller, Rotary and Chamber of Commerce Awards. President of India Award for best employer of the physically challenged.


Eight Indian firms among S&P`s challengers to global majorsBS Reporter / New Delhi May 11, 2007: Eight Indian firms among S&P`s challengers to global majors BS Reporter / New Delhi May 11, 2007 Eight Indian firms from industries as diverse as cement, hospitality, textiles and consumer goods are expected to emerge as challengers to the world’s leading blue chip companies, according to rating agency Standard & Poor’s (S&P) annual rating of global challengers Market Cap ($million) ACC 4,590.91 Siemens India 4,320.96 Indian Hotels Co. 2,044.46 Lakshmi Machine Works 1,004.50 Titan Industries 861.56 Marico 742.54 Hotel Leela Venture 530.02 Jain Irrigation Systems 505.19 Source: S&P, m-cap as of Dec 31, 2006


Our businesses: Our businesses Watches Jewellery International Business Precision Engineering Operating in 30 countries with a larger footprint in the Middle East and Asia-Pacific regions Prescription Eyewear


Our Brands: Our Brands TITAN SONATA FASTRACK XYLYS TANISHQ GOLD PLUS TITAN EYE+


THE THREE YEAR JOURNEY..: THE THREE YEAR JOURNEY..


THE THREE YEAR JOURNEY..: THE THREE YEAR JOURNEY..


THE THREE YEAR JOURNEY..: THE THREE YEAR JOURNEY..


Market Capitalisation (Rs. Cr.): Market Capitalisation (Rs. Cr.) Crossed Billion $


2006-07 – An year to remember..: 2006-07 – An year to remember.. Financials Company Income crossed Rs. 2000 Crore mark PBT crossed Rs. 100 Crore mark Share price crossed Rs. 1000 and Market cap crossed a billion dollar Brands Brand Tanishq crossed Rs. 1000 Crore mark Brand Titan crossed Rs. 500 Crore mark Brand Sonata crossed Rs. 300 Crore mark Brand Fastrack crossed Rs. 100 Crore mark Retailing World of Titan stores crossed 200 Retail space – added over 60000 sqft. Large format Flagship store – Rs. 100 Crore in first year New Businesses Expansion of Gold Plus Titan Eye + began its journey


2007-08 PERFORMANCEQUARTER 1: 2007-08 PERFORMANCE QUARTER 1


PERFORMANCE – 2007-08 – I QTRINCOME: PERFORMANCE – 2007-08 – I QTR INCOME 17% 48% 65%


I Watch Business: I Watch Business


The watch market & industry in India: The watch market & industry in India India is an under-penetrated market for watches – only 27 % of Indians own a watch Total estimated market as of 2007 Volume ~ 39 mn units & Value: Rs 2500 Crores (USD 550 Mn) Vast proportion of the Indian market is below Rs 500 ~ 68% (85% by volume) Market has been split into: Low end, Mass market, Mid market, Premium


Slide21: TITAN Citizen Timex Watch Market Map Rs 500 1000 2000 4000 5000 20,000 + Formal / Classic Fashion/Sporty Sonata, HMT, Maxima Espirit, Swatch Fossil Giordano, DKNY, Carrera Tommy Hilfiger Raymond Weil Tissot Omega,Rado, Longines Tag Heuer Hugo Boss C Dior Price Fastrack XYLYS 10000 Nebula


Slide22: Significant growth over the past three years Rs. 746 Crores Sales during the latest financial year Profits Impressive turnaround PBT (2004/05) - Rs. 70 Crores PBT (2005/06) - Rs. 90 Crores PBT (2006-07) - Rs. 96 Crores ROCE ROCE exceeds Cost of Funds ROCE (2004/05) - 39% ROCE (2005/06) - 50% ROCE (2006-07) - 50% Revenues ROCE OUR WATCH BUSINESS – OVERVIEW


Our market and brand leadership of >50% uses the muscle of a vast distribution network: Our market and brand leadership of >50% uses the muscle of a vast distribution network ALL INDIA 10,000 Dealers 2300 Towns World Of Titan 220 Showrooms 113 Towns Time Zones 117 Multi-brand-stores 73 Towns Service Centers 751 Centers 348 Towns


II Jewellery Business: II Jewellery Business


Jewellery – Market & industry highlights: Jewellery – Market & industry highlights Size of market: Rs 65000 crores (~ US$ 15 billion) Urban market is about 38% of this base Branded jewellery is less than 2% 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 20% of the market Players Market Key players: Fragmented market, mainly retailer driven. Most retailers are unorganised 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


Slide26: TANISHQ TODAY – A BRIEF OVERVIEW Strongest and most aspirational brand in the jewellery category Award most admired brand and Retailer of the year by Images Fashion Enjoys a market share of 70% in branded jewellery Network India’s only national jewellery retailer 94 stores in 67 towns – prime high street locations Most of these stores are run by franchisees Customer Base 1.5 million customers shopped at Tanishq last year Brand


Slide27: Rapid growth of 40% p.a. over the past three years Rs. 1252 crores during the latest financial year 58% of the Company’s revenues Profits Impressive turnaround PBT (2004/05) - Rs. 20 crores PBT (2005/06) - Rs. 35 crores PBT (2006-07) - Rs. 77 crores ROCE ROCE exceeds Cost of Funds ROCE (2004/05) - 29% ROCE (2005/06) - 34% ROCE (2006-07) - 61% Revenues TANISHQ TODAY – A BRIEF OVERVIEW


III INTERNATIONAL  OPERATIONS: III INTERNATIONAL OPERATIONS


INTERNATIONAL BUSINESS: INTERNATIONAL BUSINESS One of India’s first companies to market a consumer brand overseas. Now present in 30 countries Among the top 3 brands in some Asian countries Selling 750k watches annually with increasing presence in jewellery. Total export sales of over Rs 100 crores in 2006-07


IV Precision Engineering Business: IV Precision Engineering Business


Precision Engineering Business: Precision Engineering Business Rationale Leveraging Engineering capabilities B2B business – balances risk of B2C businesses The Opportunity India growing as a manufacturing base for precision products across industries Cost pressures and offset requirements guarantee a long term opportunity High cost of switching for customers Large & growing market: The global market for precision engineering products addressable by Titan is Rs.135,000 cr.


Slide32: Current position: 3 segments 3 streams Automotive Aerospace Medical Precision components Dash board instruments Sub systems Market Size Rs 135,000 Cr. Automation Solutions Market Size Rs 575 Cr. Domestic & International Market. Domestic Market Only TSMG Study


Precision Engineering Business: Precision Engineering Business The Customers Eaton, US Hamilton Sunstrand, US Microtechnica, Italy Pratt & Witney, US Schlumberger, US Ford, UK Bosch, India Timken, India Lucas, India Visteon, US / India Tyco Electronics, India Stanadyne, India Tata Motors, India Turbo Energy, India


Gold Plus :Size of the opportunity: Gold Plus :Size of the opportunity Semi-urban and rural market estimated to be as much as 50% of the total : Over Rs 30,000 crs. Highly value conscious consumer, buying traditional jewellery Very fragmented industry with underkaratage still prevalent in many parts A new business model and new brand to exploit this opportunity


THE EYE WEAR BUSINESS: THE EYE WEAR BUSINESS Started in 2004-05 by marketing Sunglasses under the Fastrack brand Targeted the youth segment Achieved a sales turnover of over Rs 25 crores in 2006 - 07 Pilot project for Prescription Eyewear started in Q4 2006 - 07


Way Forward: Way Forward


Slide37: Seize the Opportunity ! A Company that endears itself to millions of Indians … Will touch the lives of almost 14 million customers this year … Based in Happening India


Slide38: Seize the opportunity ! Happening India :A $ 270 Billion market !! Emerging consumption patterns driven by : The upwardly mobile young adult The working woman The new rich The aspiring middle class


Slide39: Seize the opportunity ! Changing Consumption Basket - Lifestyle related spends moving up at the expense of Regular spends Urban working women in India , on an average , spend about 24% of their earnings on enhancing the quality of their own life & on self grooming as compared to 13% on household purchases . Tanishq & Raga …positioned to capture the Indian woman’s heart


Slide40: Seize the Opportunity ! The Rural and semi urban renaissance.. Global retailers talking of Tier II and III cities … Sonata and Gold Plus .. Our Company’s strengths .. Encashing the opportunity..


Slide41: Seize the Opportunity ! Top 9 cities account for 30% of urban market, next 130 cities provide an equally large market Consumer spend in Tier II cities estimated at $34 billion Distribution of malls to be 50% in Tier I cities and 50% in Tier II and III cities


Slide42: Seize the Opportunity ! A young and resurgent India 50% of India’s population are less than 25 years of age ! Young affluents on the rise India adds around 3 million young earners in the age group 20-24 annually Fastrack explores the opportunity the youth offer 80 million new jobs opening up in by 2011


Slide43: Seize the Opportunity ! Organised Retailing –The New Buzz 94 Tanishq stores 220 World of Titan stores 12 Goldplus stores 15 Sonata stores 117 Timezones and 135 Watch Care Centres …this year accounted for Rs 1700 cr of sales making us India’s largest speciality retailer


Slide44: Seize the opportunity ! Retailing Expansion 2007 – 08 WORLD OF TITAN SONATA FASTRACK KIOSKS TANISHQ GOLD PLUS TITAN EYE+ 207 TO 268 15 TO 25 10 TO 40 88 TO 96 10 TO 18 6 TO 18


So what kind of company?: So what kind of company?


By 2010, More than a billion $ company: By 2010, More than a billion $ company Income Rs Crs


Multiple Businesses , Brands and Geographies: Multiple Businesses , Brands and Geographies Watches Jewellery Sun glasses Precision parts Watches Jewellery Sun glasses Eyewear Precision parts PRODUCTS TITAN SONATA FASTRACK TANISHQ TITAN SONATA FASTRACK TANISHQ XYLYS GOLD PLUS TITAN EYE + BRANDS 300 STORES IN INDIA AND PRESENCE IN 26 COUNTRIES 450 STORES IN INDIA AND PRESENCE IN 37 COUNTRIES GEOGRAPHIES 7 SBUs 7 PLANTS WITH 3500 PEOPLE 10 SBUs 9 PLANTS WITH 4500 PEOPLE UNITS


THANK YOU: THANK YOU