The stock value of Titan Company plunged 14 percent on July 9, losing ₹15,500 crore ($2.2 billion) after it reported a slowdown in its jewellery business during the June quarter. Titan is owner of India’s largest jewellery brand Tanishq and holds a majority interest in multi-channel brand CaratLane.
Titan’s watch division registered 19 percent revenue growth during the quarter, while its eyewear segment racked up 13 percent revenue growth during the period. But the jewellery division, which contributed 82 percent of the company’s revenue in the last fiscal year, registered a sharp slowdown after the price of gold rose 10 percent in June quarter.
Compounding that, the Indian government has now announced a hike in the import duty on gold from 10 to 12.5 percent.
Global brokerage firm Credit Suisse downgraded the company’s stock to neutral but said the negative impact of high gold prices should not last beyond a few months. HSBC also downgraded the stock to hold and maintained target price at ₹1,300 ($19) per share. IDFC Securities, however, maintained an outperform rating on the stock with a target price at ₹1,310 per share, but expects the stock to remain under pressure in the near term.