C K Venkataraman, the current chief executive officer (CEO) of the Titan jewellery business, who is going to take over the reins from Bhat on October 1, describes him as a people person.
“He puts people at the centre of everything, believing in their full potential and looking only at their positive aspects,” he says.
“His (Bhat’s) belief and trust in people coupled with the freedom he gives to managers has created an entrepreneurial culture, leading to significant top talent development,” concurs S Ravi Kant, who heads the watches and accessories business at Titan.
Bhat joined the Tata Watch Project in 1983, which later went on to become Titan Company
that we see today.
Until 1982, the watches market was closed for private players, dominated by state-run HMT which was known ‘timekeeper to the nation’. When the government realised that capacity wasn’t enough and people were waiting for days to get their HMT watch, the market was opened up with certain restrictions. As the Tata Group came under Monopolies and Restrictive Trade Practices Act, it could not enter the market alone. Hence a joint venture was formed with the Tamil Nadu Industrial Development Corporation, and thus Titan Watches started operations in 1987.
What catapulted Titan Watches was its early investment in quartz to manufacture fully automatic watches unlike HMT which was a master in mechanical watches. The legacy of Tata prompted HMT’s top four executives to join Titan, and from there, the company did not have to look back. By 1992, Titan had taken the top slot and was touted as a giant slayer, toppling HMT. However, Bhat says, “It was more of a decline of HMT in the early 1990s rather than the growth of Titan as the former didn’t invest in quartz sufficiently.”
Titan, which was started as a watches-only business with an investment of Rs 100 crore, diversified into jewellery in 1994 and later into eyewear in 2007, under the leadership of Bhat. Today, it stands tall as an over Rs 19,000 crore business and is weaving a new segment of handloom sarees under Taneira.
Since Bhat became the MD on April 1, 2002, the company's shares have risen astronomically by 400 times to hover around Rs 1,130. This is around 40 times higher compared to the rise of the Sensex during this period.
So far as the market cap is concerned, Titan has moved to around Rs 95,000 crore from a meagre Rs 220 crore as reported in 2002. No wonder, with such a rise, Titan emerged as the crown jewel in the Tata stable with its market value coming second after Tata Consultancy Services. Also, Titan is currently trading 60 times its EPS (earnings per share).
With Rs 19,960 crore revenue and a net profit of Rs 1,388 crore in FY19, Titan delivered a compound annual growth rate of 21.5 per cent in the last 18 years. “Of course, we have benefitted from the economic growth of India in the last two decades and I think the India story will still play out (in the future). Look at our population of 1.3 billion people and the aspiring population, which is going to grow,” Bhat says.
Currently, the jewellery vertical contributes around 83 per cent of Titan’s standalone revenues while watches account for 13 per cent and eyewear around 3 per cent. “In watches, the revenue contribution may be less but it gives us a lot of opportunity for cross-selling our other products,” Bhat says, adding that in the jewellery segment, it is practically difficult for any competitor to overtake the Tata Group firm.
The company, in which the big bull of Indian market Rakesh Jhunjhunwala and his wife hold around 7 per cent stake, has now set out an ambitious plan to reach out to 50 million customers by 2022-23, with an aggregate revenue of Rs 53,000 crore.