Budget 2024: Titan Company and Other Jewelers See Share Price Gains
The unveiling of Budget 2024 by Finance minister Nirmala Sitharaman brought good news for jewelers, with companies like Titan Company, Senco Gold Ltd, PC Jeweller Ltd, and Kalyan Jewellers India Ltd seeing share price gains of up to 12% during Intraday trades on Tuesday. The budget included a proposal to cut customs duty on gold and silver to 6%, while also reducing the customs duty on platinum to 6.4%.
Titan Company Leads in Nifty 50 Stocks
Despite steep corrections in the Nifty-50 index, Titan Company emerged as one of the largest gainers in the Nifty 50 stocks. The share price of Titan Company, which opened at ₹3,255.10, slightly higher than the previous close of ₹3,254.45, rose to ₹3,490.00 levels, showing gains of over 7.2%.
Senco Gold Sees Significant Gains
Similarly, Senco Gold saw its share price opening at ₹948.80, close to its previous level of ₹941.60, but it climbed to highs of ₹1,054.35, recording gains of nearly 12% on the NSE on Tuesday.
Positive Impact on Demand for Jewelry
The reduction in customs duty on gold and silver was welcomed by experts who believed that the total incidence of 18.5%, including GST, dropping to 9.2% would positively impact demand. With the upcoming festive season on the horizon, the lower tax incidence is expected to stimulate demand further.
Insight from Analyst Sriram Iyer
Sriram Iyer, a Senior Research Analyst at Reliance Securities, highlighted the government’s decision to increase duty on gold and silver imports to 15% in the interim budget. However, in the final budget, the customs duty on both gold and silver bars was reduced from 10% to 5%, with the Agriculture Infrastructure and Development Cess (AIDC) also dropping to 1%. The total taxation rate now stands at 6%, marking a significant reduction from the initial 15%.
Potential Impact on Gold and Silver Prices
Following the announcement, gold and silver prices experienced a notable decrease of over 5% on Tuesday afternoon. Analysts believe that further selling may occur in the market in response to this development.
Overall, the reduction in customs duty on precious metals is expected to have a positive impact on the jewelry sector and stimulate demand. Investors are advised to consult with certified experts before making any investment decisions.
