The Rise in The Share Price of Titan : Probable Reasons and Outcomes

The-Rise-in-The-Share-Price-of-Titan--Probable-Reasons-and-Outcomes

Titan has been a primary focus nowadays due to the high price rise in the stock. The company has been a prime focus of traders as it is one of the preliminary stocks of Rakesh Jhunjhunwala. Apart from this the company has been constantly diversifying its business through new tranches. There are multiple brand names under the company. The most famous ones are SKINN, Zoop, Titan Eyeplus, Fastrack, Sonata, CaratLane, Tanishq etc. These are some brands from diversified business backgrounds.

For instance Titan EyePlus is for spectacles, Caratlane and Tanishq are for jewellery, Skinn is Titan’s Brand for perfume, Zoop and Fastrack along with Titan are for the company’s primary business of Watches. The stock has been in focus since a long time due to the investments of Ace Investor Rakesh Jhunjhunwala. The company is owned by the giant Conglomerate TATA Group along with its partner TIDCO. The company initiated its operations in 1984 and now has more than 1854 stores across India. Titan works as a retailer and hence the direct customer benefit is possible without any intervention.

Today Titan is the 5th integrated watch manufacturer in the world. The group was not making much progress until it started developing its retail chain. The primary focus was customer satisfaction along with Trust.

The company has been serving customers with premium collections at high prices but in return they try to offer the best craftsmanship and designs under their brands and diversified business. The company believes in constant creativity and hence it also continues its drive to introduce new products every year under its watch and jewellery business. Also the Perfume business forms an average part of Titan’s earnings.

Titan Stock Price Rise

The stock price of Titan Limited rose by 10% in the 7th Oct, 2021 session. There were multiple reasons behind this increase and the primary one being the company’s outstanding performance. Titan has been suffering heavily from losses given the COVID situation. The company has maintained its business together but was under a heavy debt due to the interest payments.

However once the situations were normalised it accepted multiple strategies and mixes of discount and festival offers to focus on creating more sales. Their primary goal was not higher margin rather it was higher sales. Thus the company worked on the principle and succeeded this quarter. The profits and sales are now getting shifted to pre-COVID levels and hence the company is showing much growth in its domain.

In current times it is almost impossible to start a new brand with such a huge exposure and stay afloat during the pandemic. Due to the high cash reserves the company has managed to stay alive and continue the business operations. Also one major reason behind this rise was the constant buying activity seen in the markets and the Index together. The market participants were showing great demand for the Indian stocks in the session for the day which gave an additional boost to the Titan rally. Along with Titan, Tata Motors also rose by more than 10% in the day. Thus the demand and supply equilibrium was an important feature of this sudden price rise.

Along With this many analyst firms like Maquire still maintain the buying rating on it. There are others such as Emkay and Motilal Oswal who also support the buying rating. This has been based on the future sale increase possible in the domestic and international markets. One should always carry his or her own analysis before picking up a stock but looking at such calls also boost the confidence of traders and investors. Thus the rise in price is a mixture of all such factors coming together. One last reason is the holding of Rakesh Jhunjunwala in the company.

Rakesh Jhunjhunwala and Titan

The Ace investor of India has been making rapid gains since the last month on multiple stocks. This includes the recent deal of Zee Entertainment and its profit of 65 Crore Rs within a fortnight. With Titan the story is completely different. Rakesh Jhunjhunwala has been a fan of the company and its investors for a very long time. The estimated gains of Rakesh Jhunjhunwala with such a rise was 900 crore Rs. in the initial phase of the day. However even with such a high rise in prices, Rakesh Jhunjhunwala keeps a holding rating on his shares. He has not at all sold his shares even when the company hit a 52 Week high today.

As per the bull this is just the beginning of the future bull run. The companies currently are going in a good phase but eventually the index and markets will become a victim of profit booking or foreign investment withdrawing. In such a situation as well he prefers buying the Titan shares at dips. The Investor also suggested that the shares have been one of his most successful investments till date. Titan will continue increasing due to its multiple sources of income and numerous brands under its portfolio.

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