Rakesh Jhunjhunwala gained a staggering Rs 913 crore on his favourite stock Titan Company Ltd in the initial hour of trade on Thursday.
Rakesh Jhunjhunwala gained a staggering Rs 913 crore on his favourite stock Titan Company Ltd in the initial hour of trade on Thursday. The Tata Group company soared 10% to hit the upper circuit and a new 52-week high of Rs 2,361 per share as investors reacted to the positive business update provided by the company for the July-September period. Titan was the top gainer on Sensex on Thursday morning with a stellar performance on the bourses. Big Bull Rakesh Jhunjhunwala has been a fan of Titan for ages now and has continued to hold the stock in his portfolio for more than a decade.
Big Bull’s massive gains
Currently, the big bulls own 4.26 crore equity shares of Titan Company ltd along with his wife Rekha Jhunjhunwala. The couple jointly holds a 4.81% stake in the company, as per data available on the BSE website. Titan share price settled at Rs 2,146.80 per share on Wednesday afternoon, where the value of Rakesh Jhunjhunwala’s investment in the firm stood at Rs 9,156 crore. As the stock price soared higher on Thursday morning to reach a new high of Rs 2,353 per share, the value of big bull’s investment in the company reached Rs 10,069 crore. This translated to a whopping Rs 879 crore.
In the quarterly business update, Titan informed investors that “the Company witnessed strong recovery in demand after the second wave across its consumer businesses with sales moving
swiftly above or close to pre-pandemic levels in most of the divisions”. Titan said that the jewellery business saw 78% growth when compared to the year-ago period while the watches and wearables business saw 73% growth. Titan added that it other business saw a massive 121% year-on-year growth.
Analysts remain bullish
“Titan has been an exceptional performer in the discretionary space with stock price appreciating at 40% CAGR in last five years. We continue to remain structurally positive and maintain ‘buy’ rating,” said ICICI Direct in a report. The brokerage firm has a target price of Rs 2,550 per share, which could see the stock rally another 8% from today’s high. “Robust performance in challenging times reaffirms our thesis of long term market share gains for Titan. Softening of gold prices coupled with strong festive and wedding season are expected to accelerate the growth trajectory,” they added.
Analysts at Motilal Oswal said that Titan’s performance is driven by stable gold prices over the past few months, pent-up demand, continued tailwinds in favor of organized players, robust consumer sentiment, and advanced wedding purchases. They added that margin would be impacted in the July-September quarter due to the lower contribution of studded jewellery. However, the strong topline growth would still drive sharp EBITDA growth. “The structural investment case for Titan remains extremely strong. We maintain our ‘Buy’ rating, with a target price of Rs 2,460 per share at 65x Dec’23E EPS,” they said.