TITAN – Biggest single day fall in 11 years

TITAN, one of the darlings of Indian stock market investors and fund managers favourite gave back 13% in a single day, following downgrades from 3 brokerages, Morgan Stanley, Credit Suisse & HSBC. These downgrades come as a surprise after the company reported a slump in jewellery sales due to increase in Gold prices.

Six months of rise in prices which happened at a slow pace was destroyed in 2 weeks. That is stock markets, it is said that ‘Bulls climb by the stairs, Bears jump out of window’. One more classic example for this saying in real time.

Why such a big crash of confidence on the stock, that is the only brand which has international presence from India. That much is the confidence we have on our companies. Gold prices have been going up since beginning June 2019 following tensions in the middle east between Iran and the US.

AS THE STOCK PRICE CRASHES, MEDIA COMES OUT WITH REPORTS THAT THE BIG BULL RAKESH JHUNJHUNWALA HAS ALSO BEEN REDUCING STAKE IN TITAN. THE BIG BULL HAS BEEN HOLDING TITAN FOR DECADES NOW AND THE REDUCTION IN HIS HOLDING IS ONLY 0.04% EACH OF THE LAST 2 QUARTERS.

How media disturbs viewers mind? Here is one good example for it. Last week before the budget who was saying that our market is bullish, it is climbing peaks, getting strong. I 2 days after budget and market turned down, the same media is now crying bearishness.

For long term investors in Titan, the sky will not fall down. This is one of the best managed businesses of India. It has a marketing strength that no other consumer facing business has in our country. It can see some periods of tightness in price, while in the long run, it will still play out strong.

Investors can be rest assured that even their grand children will be using Titan products with price. I remember a beautiful experience from this company’s AGM in its very early days. When JRD Tata chaired the AGM, some of the investors attending the AGM asked why the company did not give any gift to its shareholders, which used to be a norm those days. JRD’s answer was,” your company is creating products that will be cherished by the world, you cannot expect to get them free of cost just because of being a shareholder.”

In the last 30 years since this event happened in its small facility in Hosur, Tamil Nadu, TITAN has grown to be a brand that every Indian prides to have.

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Ramesh Sigamani

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