MERIND-Diversification Plans

EPW Research Foundation TITAN INDUSTRIES Rising Market Share TITAN INDUSTRIES (Tl) (formerly Titan Watches) has emerged as a major manufacturer of quartz watches in the country with a 60 per cent market share. Coupled with the 1 5 per cent market share of Timex Watches (whose production is sold and marketed by TI), the company's effective market share stood at 75 per cent of Indian- made quartz analog watches and about 15 percent of the estimated 18 million watches sold in the country every year, including mechanical, quartz and digital watches from all indigenous and imported sources, both legal and otherwise. Belonging to the Tata group of companies, TI has the country's largest integrated quartz watch and component plant employing 2,000 people and using the latest technology. For the year 1992-93 while the company's net sales rose by 23.4 per cent over the previous year, operating profit improved by 2.8 per cent. However, the company's margins were under pressure due to the recession in the consumer durable market, high interest rates, increase in operating costs and the sharp increase in excise levies and consequently, net profit fell by 2.5 per cent. During the year, the company's equity capital rose by 57.5 per cent following conversion of its 12.5 per cent convertible debentures and the rights issue of equity shares in December 1992. The debenture conversion and rights issue have added a hefty Rs 61.7 crore to the company's reserves taking its book value from Rs 14.53 to Rs 28.41. Despite the fall in net profit and the rise in equity capital the company hiked the dividend rate from 20 per cent last year to 22 per cent entailing a proportionately higher dividend outgo.