Tata Group company Titan recently announced that the company’s operating cash flow was negative in the last two months due to virtually zero sales in the first six weeks of lockdown, increase in mark-to-market cash outflow on gold hedge due to rising gold prices and committed costs being incurred.
However, these mark-to-market cash outflow is expected to be recovered when jewellery sale commences. Thus, the Covid-19 situation is expected to adversely affect profitability during the first half of this year.
As Titan was forced to shut all its stores and manufacturing facilities from March 17 until the first week of May, it hit operations severely. Titan was able to do some sales through e-commerce during the period, missing out the Akshaya Tritiya holiday sales as well as the wedding-season purchasing.
Of late, since lockdown restrictions were lifted, Titan has reopened about 43% of its stores, recording 50% of their normal revenue from those outlets.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
