Titan gains 3% as gold escapes import duty hike 

NEW DELHI: Shares of Titan Company gained more than 3 per cent on Thursday as the government did not raise import duty on gold from the existing 10 per cent, contrary to speculations. 

The government has instead raised import duty to 20 per cent from 15 per cent on jewellery and to 7.5 per cent from 5 per cent on cut and polished diamonds, which is unlikely to affect the company. 

The stock jumped 3.27 per cent to hit a high of Rs 838.75 on the BSE early today. 

Bhaskar Bhat, MD, Titan, said: "Large part of its imports is gold, where the import duty has not been touched. It is a wise move by the government as it will garner more taxes, given the weak CAD position. As of now, the marginal increase in import duty is not going to affect the industry much.” 

In terms of total value to the entire business, this is not such a significant part of Titan’s business at least. A large part of the Indian jewellery sale is plain gold jewellery, which is nearly 85 per cent of total sales. Diamond and studded sales account for 15-20 per cent. Though there is a cost increase, it will be paid by the consumer, Bhat told ETNow. 

Bhat does not see a significant dent on consumer pocket. “Consumers have paid much higher prices for gold in the past when gold prices surged. I think festival season sale is safe and it is going to be a good festival,” he said.