There he also got involved in what was called the Tata Titan
Watch Project, which evolved through the adaptation of quartz watches, and eventually become Titan Watches. Consequently, in the two and a half decades he was there, Bhat worked his way up the ladder before he eventually took charge of Titan.
Bhaskat Bhat, Non-Executive Director, Titan | File photo
At that point in time the choice was clear: Change or die. So change Titan did, under Bhat, who kicked off a very successful innings at the Tata-owned company by slashing nearly a fifth of the firm’s workforce, thereby bringing Titan’s manufacturing and operating costs under control.
Next, he tackled the company’s working capital cycle by reducing the inventory of finished goods lying at various points in the company's supply chain. The sales teams were told to focus on generating cash flows rather than push volumes through the system to show higher sales and revenues. The gambit paid off, as cash flows from operations rose sharply from 2002 onwards, even though profits picked up momentum gradually. But the accruing funds did allow Titan to do what the company was unable to do before, which is use the extra cash to expand by creating new brands, new segment categories and thereby new revenue streams.
That wasn't all. Bhat, best known for his smiling demeanour, ability to remain calm at all times and a penchant for personally connecting with his stakeholders, also used cash flow to retire debt, thus putting Titan’s books in the black by the financial year 2010, as opposed to a debt-to-equity ratio of nearly 3x in 2002. Billionaire investor Rakesh Jhunjhunwala bought into the Titan turnaround story early, and the company remains his top holding even today. With the Big Bull’s endorsement, the Street too lapped up Titan shares.
But market cap and profits aside, the Bengaluru-based company’s biggest success has been its transformation from a mid-sized watch and jewellery maker to one of the country’s largest designer, manufacturer and retailer of lifestyle products. The company’s product portfolio today ranges from value-for-money watches, accessories, bags, perfumes, prescription and lifestyle eye wear, jewellery for all occasions, and luxury and wedding wear for women (sarees).
Titan is India’s largest and the world’s fifth biggest watch maker and figures as competition for global brands such as Casio, Seiko and Swatch. It also continues to dominate the category with a countrywide sales, distribution and service network that runs into thousands of sales and touch points. In recent times Titan has also gone ahead and acquired storied Swiss watchmaker Favre-Leuba, which remains a small niche channel for the business but throws up endless possibilities in terms of acquiring knowhow and global access to a rarefied audience of watch collectors.
Its jewellery brand Tanishq leads the organised segment, while Titan Eyeplus is now the single largest retailer of prescription eyewear in the country. In a brief period, Titan Skinn has emerged as one of India’s top selling perfume brands, and Fastrack has pushed that niche even further with recently released fragrances at even lower price points that management says accompanies its namesake of watch and eyewear products.
The company has also been very successful in creating brands from scratch. For example, Fastrack is now one of the largest lifestyle brands for youth with presence across segments, from watches to sun glasses and accessories to luggage. In e-commerce, diamond seller Caratlane, which is majority-owned by Titan, is one of the most popular jewellery portals in the country.
Bhat, who has helmed the company since he was in the driver’s seat, put Titan in a position to take full advantage of the consumption boom in the country. Company executives say Bhat straightened the growth path by orienting Titan away from design and product manufacturing to becoming a retail company, but it went beyond that. The company also went into franchising in a big way to set up a national chain of high-street stores to sell and service its range of products.
At present, Titan and Tanishq are two of the most visible and trusted lifestyle and consumer brands in the country. Bhat also stepped up the game by scaling up investment in brand building and promotion. As footfalls in its stores increased, Titan began to steadily diversify into newer categories by launching new brands and extensions. There's luxury jewellery brand Zoya, jewellery line for men Aveer, designer sarees Taneira, and so on.
It’s not just a product line and a diversified business that Bhat has set up. A vital but overlooked contribution is also how he planned succession for the group, having left behind a steady and stable line of managers headed by Titan veteran C K Venkataraman, who succeeded Bhat as managing director in October 2019. After his retirement from Titan, the canvas for Bhat just got bigger, as he was elevated to the Tata Sons board.
To say that Bhat’s track record is exemplary would be an understatement, but his leadership has set a new standard and one that will hopefully inspire legions of CEOs for decades to come.