Titan stock drops 2% after Kotak Institutional Equities' downgrade to 'reduce'

Shares of Titan have also been under pressure in recent times, falling nearly 13 percent in the past three months.

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26 Aug, 2025 12:21

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Shares of Titan Company dropped 2 percent on July 5 after brokerage firm Kotak Institutional Equities downgraded the stock to 'reduce' from the earlier 'add' call, citing unfavourable risk reward.

At 12.11 pm, shares of Titan were trading at Rs 3,270 on the NSE.

The brokerage highlighted external challenges for Titan, including potential heightened competition due to Aditya Birla Group’s Novel Jewels launch. Additionally, the direct or indirect effects of lab-grown diamonds could impact Tanishq's growth and profitability, influencing Titan's future growth trajectory, the firm believes.

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Aside from these, KIE also sees Titan facing margin pressures from other fronts as well. Firstly, the substantial rise in gold prices necessitates a similar increase in making charges, posing challenges in maintaining EBIT margins for the jewellery maker. Secondly, heightened competitive pressures, especially from Malabar and Kalyan, have compelled Tanishq to reduce its markup on gold rates, the firm noted.

"While we admire Titan's execution, its risk-reward remains unfavorable amid these headwinds and high expectations," KIE stated.

Factoring these external headwinds, KIE also slashed its price target for the stock by nearly 15 percent to Rs 3,045, implying a potential downside of nearly 8 percent from the previous close. Along with that, the brokerage also cut its FY25-27 earnings-per-stock targets for Titan by 5 percent to now 10-12 percent.

Shares of Titan have also been under pressure in recent times, falling nearly 13 percent in the past three months.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.