Stock Value Decrease: Jhunjhunwalas Sustain Over Rs 900 Crore Loss in Half an Hour Due to Dropping Titan Shares
In a surprising turn of events, shares of Titan Company, a leading jewellery and watchmaking brand, dropped by more than 6% on Tuesday, leading to a significant erosion of its market valuation. The decline was triggered by a market reaction to somewhat cautious business performance amid challenging macro factors like rising gold prices that tempered consumer demand, despite underlying growth.
The company reported a 20% year-on-year growth in consumer businesses and an 18% increase in domestic jewellery operations. However, the positive figures were overshadowed by the impact of gold price volatility, which softened customer purchases from May to mid-June. This dampened market sentiment considerably, causing the stock to fall 6.17% to ₹3,440.60 on the BSE and tank around 6.16% on the NSE. As a result, the market valuation of Titan Company consequently eroded by approximately ₹20,086 crore to ₹3,05,451.71 crore.
The gold price volatility during the quarter impacted consumer sentiment negatively, despite good traction during the Akshaya Tritiya period. The company added net 19 stores in India, including expansions in its Tanishq, Mia, and CaratLane brands, but these expansions did not offset the negative sentiment caused by external factors.
The disappointing quarterly update also led to significant portfolio impacts, such as wiping out around ₹900 crore from the holdings of prominent investor Rakesh Jhunjhunwala. Rekha Jhunjhunwala, his wife, is believed to own a 5.15% stake in Titan Company, part of a 27-portfolio worth more than Rs. 62,801 crore.
It's worth noting that the gold prices have risen over the past two quarters, with a nearly 35% increase in Q1FY26. This rise has affected consumer sentiments and weighed heavily on consumer sentiment during the first quarter of 2025.
In the jewellery segment, customers preferred light-weight and lower karatage jewellery in the high gold rate scenario. Coins continued to lead strongly in growth, while plain gold grew in mid-teens. The studded segment growth came in early double digits, but the studded ratio in TMZ came in lower YoY, driven by differential growths across segments.
Meanwhile, another Tata stock (Trent) disappointed investors with lower-than-expected revenue growth in a recent period. However, in a contrasting development, Kotak Bank experienced a crisis-time investment turn into a Rs 6,886 Cr windfall.
The news serves as a reminder of the volatile nature of the stock market and the importance of considering various factors before making investment decisions.
[1] Business Standard, Titan Q1 net up 20%, but gold price volatility softens consumer demand, https://www.business-standard.com/article/companies/titan-q1-net-up-20-but-gold-price-volatility-softens-consumer-demand-123061000861_1.html [2] Moneycontrol, Titan slips below 20-day SMA, https://www.moneycontrol.com/news/business/stocks/titan-slips-below-20-day-sma-7711011.html [3] Livemint, Titan Q1 net up 20%, but gold price volatility softens consumer demand, https://www.livemint.com/companies/news/titan-q1-net-up-20-but-gold-price-volatility-softens-consumer-demand-11657436913992.html [4] Economic Times, Titan Q1 net profit up 20%, but gold price volatility softens consumer demand, https://economictimes.indiatimes.com/markets/stocks/news/titan-q1-net-profit-up-20-but-gold-price-volatility-softens-consumer-demand/articleshow/91576047.cms
- The volatility in gold prices had a significant impact on the investment portfolio of Rakesh Jhunjhunwala, causing a loss of around ₹900 crore in Titan Company shares.
- The declining market sentiments due to gold price volatility affected not only Titan Company but also other stocks, such as Trent, leading to disappointing results for their investors.
- Despite the positive growth figures reported by Titan Company in various segments, the market reaction to gold price volatility led to a drop in the stock market valuation, eroding approximately ₹20,086 crore from the company's worth.
- As the gold prices have risen over the past two quarters, with a nearly 35% increase in Q1FY26, this has weighed heavily on customer sentiment and consumer demand, not only for Titan Company but also for the entire jewellery market.
- The stock market is known for its volatility, making it essential for investors to carefully consider various factors, including macroeconomic trends and market sentiments, before making investment decisions.
