Titan Industries recovered mid-afternoon after the stock slumped 17 percent after the management’s clarification that the company does not export any kind of jewellery and buy gold from domestic bullions reports CNBC-TV18’s Pragya Bhardwaj.
Bharadwaj adds that the RBI reinstated the gold-on-lease model that Titan focuses on. Last month, the stock cracked almost 15 percent post which there were questions about its inventory, buying gold on loan, hedging costs, etc. Now, all these questions have been put down by this one clarification of the government.
It is said that because of these norms, there is going to be a substantial shortage of gold and that number has been worked out in the range of 40 tonnes all the way up to 70 tonnes.
Titan could face problem versus the other players in the unorganized segment. Titan has a gold import license also by which it can import almost 10 tonnes. They had started some work on it. So, its entire 22 tonnes of sales could come under pressure while. However, the top-line only may not get generated because of shortage of gold. Hence, they are talking about a certain sense of uncertainty which is building on the stock and a crunching of the valuation multiple.
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