Rekha Jhunjhunwala ups stake in Tata firm stock amid 5x gain since March

Rekha Jhunjhunwala, wife of ace investor Rakesh Jhunjhunwala, surfaced as a minority shareholder in another one of Tata Group firms. This time the stock is Tata Communications which has rallied 431 per cent from its 52-week low of Rs 200 hit on March 19, 2020.
 

According to the latest shareholding pattern filed by the company, Rekha Jhunjhunwala, held 1.12 per cent stake or 3.2 million shares of Tata Communications at the end of December 2020 quarter. In September 2019, Rekha Jhunjhunwala had bought 1.97 million shares, or 0.7 per cent stake in the company, at Rs 370 apiece. Companies are mandated to post names of shareholders having over 1 per cent stake in the company. READ ABOUT IT HERE

Shares of Tata Communications were, however, trading over 2 per cent down on the NSE at Rs 1,040 in the afternoon session. It corrected 5 per cent from its 52-week high level of Rs 1,146 touched on December 24, 2020.

Big bull Jhunjhunwala, who invests both, in his and his wife's name, holds stake in four other Tata Group firms, namely Tata Motors, Titan, Indian Hotel Company and Rallis India. As per the data available on Trendlyne, Jhunjhunwala held 1.29 per cent stake in Tata Motors and 5.52 per cent stake in Titan as of September 2020. His stake stood at 1.05 per cent and 10.31 per cent in Indian Hotels and Rallis India, respectively, for the same period. These firms are yet to report their shareholding pattern for the December quarter.

Besides Jhunjhunwala, foreign institutional investors (FIIs) and mutual funds (MFs) have increased stake in the firm during the October-December quarter. FIIs have raised the stake to 17.65 per cent in the December quarter from 17.56 per cent at the end of September quarter. Meanwhile, MFs' holding in the company stood at 0.41 per cent in Q3FY21 as against 0.38 per cent in Q2FY21. Promoter holding, however, remained unchanged at 74.99 per cent.

According to the publically available data on Reuters, analysts have a consensus BUY rating on the stock.  

Commenting on Q3 earnings expectations for Tata Communications, Emkay Global said being a seasonally weak quarter, on expected lines, we pencil total revenue growth of 1 per cent year-on-year (YoY) but a 3 per cent decline quarter-on-quarter (QoQ).

"The return of Covid-19-related cost savings and the deferment of some network expenses to H2 should lead to 185 bps contraction in EBITDA margins QoQ. We expect new-deal conversion to remain muted. Some benefits of hosting media and sports events should be there though," the brokerage added.

The firm had posted a seven-fold jump in consolidated net profit at Rs 384.81 crore for the September quarter. Consolidated revenue grew 4.5 per cent to Rs 4,477.18 crore during the reported quarter from Rs 4,282.3 crore in the year-ago period.