New Gold Policy to Curb Import May Backfire – Knee Jerk Impact

One of the main concerns of Indian Government and RBI is to curb unwarranted Gold import to reduce Current Account Deficit. In recent months, gold import tax reached to 8% to manage CAD and in turn to protect India from further downgrade from leading rating agencies. In the beginning, the government initiative looked very promising but got diluted with drastic fall in Indian Currency Viz-a-Viz major global currencies. Two days back, Government and RBI came out with blow out regulation targeted towards Gold Imports for domestic consumption. The domestic companies can import Gold and Platinum only in cash which will increase cash requirements and interest cost. The Gold import companies now cannot use the credit facility. The immediate major impact got reflected on Titan equity price that experienced 35% plus crash. Being one of the most trusted brand and constant value creator for the investor, many professionals most preferred stock is Titan. Most of the leading analyst firm downgraded gold centric equity Target Price and EPS – Earning per share in current and next few financial year.

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