Investment wizard Rakesh Jhunjhunwala’s favourite scrip Titan Company Ltd surged by more than 150% in 2017. The ace investor held more than 8.02% stake in the company as at the end of September quarter, translating to 715,86,220 shares, data filed with BSE showed. Calculated at Wednesday’s closing price of Rs 854.9, his stake in the company amounts to Rs 6,119 crore, assuming no change in holdings.
It is intriguing to note that Titan Ltd forms more than one-third of his over Rs 15,000 crore portfolio. In October-17 year, Rakesh Jhunjhunwala had revealed in an interview to ET Now that Titan is his favourite stock. The surge in the shares of Titan alone may have made the ace investor richer by at least Rs 3,500 crore in 2017.
While a few investors maybe ruing the lost opportunity, global research firm Deutsche Bank has reiterated its bullishness on the shares of the company. While having a Buy rating, Deutsche Bank has raised target price for Titan Company to Rs 1,000 (from Rs 900 earlier). The firm’s target price implies an upside of nearly 17% from yesterday’s closing prices. Deutsche Bank has come out with a report on consumer sector, stating that its bull thesis for discretionary space (including durables) is based on share gains from unorganised sector.
In November this year, Titian shares made the investing icon richer by more than Rs 875 crore in a single trading session, after Titian shares surged on the back of stellar Q2 results. Titan Company Ltd had reported a whopping 67% rise in net profit to Rs 277.93 crore for the quarter ended September 30, 2017 against Rs 165.98 crore in the corresponding quarter last year. Jewellery segment, which contributed to nearly 80% of total revenue, has registered a solid 37% growth at Rs 2,748.20 crore on year-on-year basis, with its EBIT (earnings before interest and tax) growing 66.4% YoY.
Despite such stellar numbers, Rakesh Jhunjhunwala had quizzed the Titan Company management on an earnings call. In the earnings call, the big bull of Dalal Street asked, “Last year we saw a disturbed November and December and I understand you can’t forecast but there are many weddings in November and December — so would it be right to say that your sales in November and December growth should be much better as compared to September-October?”
The management responded, “Last year the entire festive season was in October. This year it got split between Q2 and Q3. There was 55% growth in that season – the base difference was high up to November 8. The base effect was high up to 8 November. After that, there was a trough and we got pulled back with our own exchange schemes.” Titan has been one of the few stock which Rakesh Jhunjhunwala has held for more than 12 years.