MUMBAI: Titan, one of the most coveted stocks, crashed on Tuesday after the company, in an update filed late on Monday with stock exchanges, warned of a slowdown in consumption. The stock sank 12.2 per cent, or Rs 153.55 a share, to close at Rs 1,099 a share on BSE. The stock had scaled to a 52-week high on July 1, even as investor attention turned to gold on global risk aversion and gold prices rallied.
“Titan fell 12.2 per cent, its steepest fall in over a decade, after predicting a muted first quarter as India’s economy faces a slowdown. Bajaj Finance registered its biggest gain in over eight months (up 5.6 per cent) as its AUM rose 41 per cent on a YoY basis and 11.3 per cent QoQ to 1.29 lakh crore in the three months ended June,” said Deepak Jasani, HDFC Securities. Like Titan’s fall, Bajaj Finance and Bajaj Finserv saw deep corrections on Monday after the company CEO talked of a serious slowdown.
Titan on Monday said the Q1 “witnessed a tough macro-economic environment with consumption being hit”. Contrary to market expectations of higher gold prices helping it, Titan said high prices in June impacted growth in the jewellery industry, and its own growth in the segment was lower than planned though it sustained gains in market share.
Even the increase in import duty on gold announced in the Budget did not impact the stock as investors looked at it as a pass-through to customers without having an impact on the company. “Current economic slowdown is likely to impact the quarterly run rates; however, Titan is likely to return the higher growth path once the consumer spending picks up in the economy. Hence, we continue to value Titan at 50x based on FY21E EPS and re-iterate HOLD rating,” Reliance Securities said.