Have you invested in any Rakesh Jhunjhunwala portfolio stocks? They outrun benchmark indices
Rakesh Jhunjhunwala has invested in 29 companies with a portfolio value aggregating over Rs 14,500 crore.
There is no introduction required for Rakesh Jhunjhunwala, as every lover of stock market would be familiar with this name. In case you are new to the equities segment of investment, then remember Jhunjhunwala is famously known as the Badshah of Dalal Street. Indian markets are booming and no one would want to miss out the gains arising from the same, however, investing in equities comes with a sense of responsibility as the process is unpredictable, volatile, even mysterious. But one can always learn from experts who have been in this field for quite a time, and ace investor Jhunjhunwala is one such man.
Among his many quotes, one that stands out goes like this, “Invest in a business not a company.” Jhunjhunwala further explains, “Invest in companies which have strong management and competitive advantage.”
Surely, these can be taken as lessons if you plan to invest in stock markets. So, let’s have a look at Jhunjhunwala's portfolio and its performance.
According to reports, Jhunjhunwala has invested in 29 companies with a portfolio value aggregating over Rs 14,500 crore. Most of these companies have given even higher returns than the overall benchmark indices could give over a period of 1 year.
In one year, Jhunjhunwala’s investment in Delta Corp has given return of a whopping 188.50%, followed by VIP Industries with 158.62% return, Autoline Industries with 151.46% return, Titan Company with 118.67% return and Firstsource Solutions with 104.44% return.
Meanwhile other companies where Jhunjhunwala has invested gave return in the range of 15% to nearly 200%. Now these are just sixteen companies data, other companies have suspected to have given higher returns also.
Currently these companies are trading at lower-levels which means one can always purchase them at the moment, to avail the amount return what Jhunjhunwala has seen. Analysts still recommend buy rating on most of his portfolios.
Elara Capital on NCC said, “We revise up our numbers and expect execution growth of ~45% and earnings growth of ~23% in FY19E. We reiterate Buy with a revised target price of Rs 164 from Rs 153. Our new TP includes the construction business value of Rs 140 based on 17x (unchanged) FY20E earnings and investments in subsidiaries at INR 24 on 1x book value.”
Edelweiss Financial Services on CRISIL says, "Credit off take picking up and recent bond market developments are key positives. However, due to slowdown in SME ratings and research, we maintain ‘HOLD’ with TP of Rs 1,825. We value by DCF method (discount rate of 9.6%) factoring 12% growth in first four years, 11% in next five and then declining gradually to terminal rate of 5%"
ICICI Securities on Titan states, "We believe Titan’s growth story will remain multi-pronged and drawn over a longer time frame. Consequently, we shift to a DCF based valuation to arrive at a target price of Rs 1090 with a BUY recommendation on the stock. On a DCF basis, we assume revenue CAGR of 20% over FY17-23E and 11% over FY24E-30E with 10.8% WACC and 4% terminal growth rate."
Prithvi Finmart Private limited on Firstsource says, " We expect an EPS of Rs 6 in FY 2020. We initiate coverage with BUY rating on the stock with a target price of INR 66 per share with potential upside of 32% in 12 months."
Emkay on Delta Corp, "The positive catalyst for the stock would be the announcement of new gaming policy by Goa government (expected in 2Q). Indian Gaming industry would expand multifold. The current PER of 30x FY20E does not factor in the benefits from new policy and/or Daman license. We maintain our BUY call with TP of Rs294 based on 30x PER."
IIFL Research on Rallis India said, “We trim FY18/19ii EPS by 1%/5% to Rs9.1/10.9 while leaving FY20ii EPS at Rs 14.3 post the 3Q FY18 earnings miss. We roll forward our TP to Mar-19, in the process raising it to Rs300 (21x FY20ii EPS).”
Top holdings of Jhunjhunwala are - The Mandhana Retail Ventures Limited at 12.74%, Aptech Limited at 12.58%, Rallis India at 9.67%, Bilcare Limited at 8.48%, Titan at 8.46%, Autoline Industries at 8.34%, Escorts at 8.16%, Geojit Financial at 7.48% and Delta Corp at 7.48%.
Jhunjhunwala stands at 54th position in Forbes list of billionares with net worth $3.2 billion. The Forebes describes Jhunjhunwala as India's Warren Buffett. He began investing in BSE in 1958 with just $100. That time, BSE was valued at 150 and has now earmarked over 36,443-height.
His biggest holding is seen at Titan which is worth more than $900 million.
With this, Jhunjhunwala’s portfolios has outrunned Sensex and Nifty 50. On yearly basis, the 31-scrip index has given more than 23% return, while the 51-scrip index merely 21% return.
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