Rakesh Jhunjhunwala cuts stake in Titan, Lupin, Escorts in March quarter

Ace investor Rakesh Jhunjhunwala rejigged his stake in 11 companies in March quarter and kept it unchanged in 8, as per the latest shareholding pattern filed by the companies till May 8, 2020. Jhunjhunwala increased his stake in six companies during the period under review, including Rallis India, VIP Industries, Federal Bank, Jubilant Life Sciences, GMR Infrastructure, and Orient Cement.  

Of these, Jubilant Life Sciences and Rallis India have outperformed the market by surging 47 per cent and 27 per cent, respectively, since April. The remaining four, however, underperformed the S&P BSE Sensex that has gained 7.5 per cent since April.

Jhunjhunwala reduced his stake in five companies including Titan Company (stake sale of over one percentage point, or 10.3 million shares), Lupin, Firstsource Solutions, NCC and Escorts. Interestingly, except Titan Company that slipped 6 per cent, the remaining four stocks outpaced the market by gaining up to 40 per cent since April.

Delta Corp, Edelweiss Financial Services, Fortis Healthcare, Crisil, and Bilcare are among the eight companies where he did not alter holding. On the other hand, TV18 Broadcast, Karur Vysya Bank, Autoline Industries and Agro Tech Foods are some of the 10 companies where they hold a stake, but the companies have not announced their latest shareholding pattern for the March quarter yet.

 

Currently, Rakesh Jhunjhunwala and his family’s net worth in listed companies stands at Rs 8,517 crore, compared to Rs 8,388 crore as on March 31, 2020. The calculation based on the latest shareholding pattern of 31 companies available on the stock exchanges and stock price of the particular dates. As of December 31, 2019, the stakes across 30 companies were valued at Rs 12,556 crore.

Titan stake lowest since September 2006

According to the shareholding pattern of the company, as of March 2020, Rakesh and Rekha Jhunjhunwala trimmed their stake to 5.53 per cent from 6.69 per cent at the end of December 2019. Currently, their combined holding in Titan Company is at over one decade low in percentage terms. Earlier, Rakesh and Rekha Jhunjhunwala held 4.9 per cent stake in Tata Group Company at the end of September 2006 quarter, shareholding pattern data show.

Thus far in the calendar year 2020, Titan stock has underperformed the market by falling 28.5 per cent, as compared to 23.7 per cent decline in the S&P BSE Sensex. The stock hit a 52-week low of Rs 720 on March 24 this year and has almost halved from its all-time high level of Rs 1,390 touched on October 25, 2019. Despite the near-term headwinds, analysts remain bullish on Titan and suggest investors stay put for now.

“Negative correlation of 0.64 per cent (Since 2010) between the gold price and jewellery demand and destruction of purchasing power due to Covid-19 will result in 17.6 per cent decline in sales and 21.6 per cent decline in jewellery EBIDTA in FY21. We expect the recovery to set in from the third quarter and play out in FY22 with 35 per cent increase in sales and 42 per cent higher EBIDTA. Retain hold and recommend accumulation on declines for long term gains," wrote Amnish Aggarwal of Prabhudas Lilladher in a co-authored report with Charmi Mehta and Heet Vora.