Rakesh Jhunjhunwala made Rs 170 crore from this auto stock in September; analysts see further upside

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September 27, 2021 12:39 PM

Big bull Rakesh Jhunjhunwala has made Rs 170 crore from his shareholding in auto major Tata Motors, so far this month.

Rakesh JhunjhunwalaTata Motor’s share price has rallied more than 14% since the end of August to now trade at Rs 332 apiece.

Big bull Rakesh Jhunjhunwala has made Rs 170 crore from his shareholding in auto major Tata Motors, so far this month. Tata Motor’s share price has rallied more than 14% since the end of August to now trade at Rs 332 apiece, up from Rs 287 per share on August 31. Tata Motor’s stock has outperformed the benchmark Nifty Auto, which jumped 5.5% during the same period. Analysts remain bullish on Tata Motors despite its recent outperformance and believe the stock could rise even further, augmenting Rakesh Jhunjhunwala’s profits in the company. 

Big bull pockets Rs 170 crore

At the end of August, the value of Rakesh Jhunjhunwala’s holding in Tata Motors was at Rs 1084.55 crore. The big bull owns 3,77,50,000 crore equity shares of the auto company. As the stock price jumped higher, the value of Rakesh Jhunjhunwala’s shareholding in the company today stands at Rs 1,254.62 crore. This translated to a profit of Rs 170 crore in a little less than one month for the big bull. The calculations done are assuming Rakesh Jhunjhunwala did not sell or buy additional shares of Tata Motors since the end of June. 

Often called the Warren Buffett of the Indian stock market, Rakesh Jhunjhunwala picked up a stake in Tata Motors in September last year, buying 4 crore equity shares of the Tata group company. The big bull later added to his shareholding in March this year before trimming it down to the current 3.77 crore equity shares at the end of the April-June quarter. 

Analysts remain bullish 

Analysts at Edelweiss believe Tata Motors share price could rally further and reach a target price of Rs 353 per share. “We remain positive on JLR’s upcoming product pipeline, which will improve the mix in favour of the more profitable LR brand. We expect demand across some of its key markets to normalise as we believe the worst is behind. Besides that, tight control on costs should also bolster profitability,” they said in a note.  “Tata Motors continues to maintain a strong focus on balance sheet improvement. Covid and semiconductor shortage have delayed the materialisation of same. As production normalises, tailwinds like model cycle for JLR–RR launch in nine months followed by RRS–demand revival in CV and sharp cost reduction initiatives will drive strong FCF, in our view,” they added.

Meanwhile, HDFC Securities has a ‘Buy’ rating on Tata Motors seeing the EV opportunity ahead. “We believe that Tata Motors will benefit from an improving demand environment, both in India as well as overseas (at JLR). Further, Tata Motors is launching electric products across its global portfolio,” they said. On the other hand, Jefferies has a price target of Rs 435 on Tata Motors, valuing the standalone business at Rs 200 per share at 4x FY23 PB and Jaguar at Rs 235 apiece at 3x FY23 EV/EBITDA.

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