Titan Industries Stock has given a return of 250% within a single year. Have you wondered whats exactly causing the buzz in this stock? Well we’ve heard the news of Rakesh Jhunjhunwala having a huge stack invested into this company. Apparently Titan Industries Limited is his all time favourite stock and he has said that his dream is to sell the stake in the company when he hits the 1 billion mark. Rakesh is known as Warren Buffet of India and everyone is dying to get a peek into his portfolio. So his interest in Titan Industries is the exact reason to why the stock has been rallying up and might continue to do so. Each one of us wants to follow him to become successful and thats exactly what is happening here. But the most important question here is : -

Should you purchase Titan Industries?

According to me, you should NOT purchase Titan Industries. I understand that the stock has rallied a lot already and might go up more but it could get really risky to get into Titan at current levels. Firstly the stock’s value is 3000 per share and that is extremely expensive. If we take a look into company’s fundamentals, then the total sales turnover for the financial year ending March 2010 is 4,675 crores but the net profit is only mere 250 crores. It’s profit is way below 10% of the sales which obviously means that it is not worth putting your buck into. And if you are still very keen on investing into Titan Industries, then I would recommend you to wait for a major correction in the stock and only then get into the stock.

Everyone has been jumping into the stock because of the news of Rakesh’s huge stake in Titan. Imagine if he secretly decides to sell all his stake in Titan, the stock will fall like anything after that. And you know that this is bound to happen when he sees he has made enough profit into the company. He will get out of the stock with a mega profit but the retail investors following him will get stuck with a loss. So simply avoid the stock or get into the stock only after it has corrected a lot and keep a strict stop loss. The stock is okay for trading, but not for a long term investment.

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