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Shares of Titan Company Ltd. fell over 2 percent in trade on Thursday after multinational investment bank UBS downgraded the stock to ‘neutral’ from ‘buy’.

UBS also cut the target price on the share by over 13 percent to Rs 2,600 from Rs 3,000 earlier.

Reacting to the development, shares of Titan fell as much as 2.2 percent to hit an intraday low of Rs 2,368.75 apiece. Notably, the stock has fallen nearly 7.5 percent in the last year compared to a 1 percent increase in the benchmark Nifty 50 index during the same period.

UBS said that Titan has been downgraded as weak jewellery demand in the fiscal year 2024 is likely to impact the company’s growth.

Rise in gold prices and depleting pandemic savings may adversely impact grammage growth thereby resulting in lower sales volumes for Titan, said UBS.

Additionally, UBS also expected normalisation in growth for watches and eyecare segments in the financial year 2024 which saw strong growth on a low base in the recent past.

However, UBS said Titan’s jewellery segment growth is likely to remain strong in the long term, given inelastic wedding demand, gold seen as an investment asset, and a low share of the organised jewellery market.

Earlier this month, Titan reported 12 percent year-on-year growth in combined sales across standalone businesses in the December quarter amid healthy consumer demand during the festive season.

Titan’s jewellery division saw growth of 11 percent year-on-year during the quarter, while the watches and wearable division grew 14 percent.

Two wholly-owned subsidiaries of the company – Titan Engineering and Automation Ltd. and CaratLane – reported 58 percent and 50 percent year-on-year growth, respectively.

Shares of Titan Ltd. are trading 1.48 percent lower at Rs 2,388.15.

(Edited by : Rukmani Krishna)