Ace investor Rakesh Jhunjhunwala may have just lost a whopping Rs 715 crore after shares of his favourite stock plunged following tepid Q2 results.
Ace investor Rakesh Jhunjhunwala may have just lost a whopping Rs 715 crore after shares of jewellery maker Titan Company plunged on Wednesday morning, following tepid Q2 results. Titan Company share price plunged by more than 9.64% to hit the day’s low at Rs 1,160 on BSE. Notably, Rakesh Jhunjhunwala has around 5.77 crore shares or 6.51% in the firm, as of the end of the September quarter, according to data available with the BSE. Calculated at yesterday’s closing price, Rakesh Jhunjhunwala’s total stake stood at Rs 7,414 crore. At Wednesday’s intra-day low, Rakesh Jhunjhunwala’s stake has fallen to Rs 6,699 crore, implying a notional loss of Rs 714 crore. It should be noted that Rakesh Jhunjhunwala will have to sell his holdings to realise the loss.
The plunge in Tata group’s jewellery major comes after the firm reported dissapointing Q2 results. Titan Company reported a 3.5% on-year jump in net profit at Rs 311.65 crore for the second quarter ended September 2019. The firm had reported a net profit of Rs 301.11 crore in the corresponding period previous fiscal. A CNBC-TV18 poll had estimated a profit of Rs 378 crore for the quarter under review. Given the ongoing slowdown, Titan has also lowered its revenue guidance from the jewellery business to 11-13% in H2FY20 from 20% earlier.
“There are risks to meeting this lowered 11-13% growth guidance for H2FY20. The first is that the December quarter will be very challenging as: (1) the festive season was early this year and some primary sales to franchisees would have been pushed to 2Q in FY20 and (2) there is a Rs 200 crore institutional order in the 3Q FY20 base,” global firm Credit Suisse said in a report. The firm has maintained a Nuetral rating on the stock with a target price of Rs 1,110.
“The company has done well across all its businesses in the second quarter given the subdued market and consumer sentiments. For the second half of FY 20, we are gearing up on all fronts to stimulate demand with innovative campaigns for new exclusive collections that are lined up for launch across all our brands,” CK Venkataraman MD of Titan said.