Rakesh Jhunjhunwala Portfolio: Top investor Rakesh Jhunjhunwala’s favorite portfolio stock, Titan, has fallen more than 15 percent so far this year (CY 2022) in a highly volatile market. In fact, Titan stock underperformed benchmark NSE Nifty 50, which is down more than 7 percent so far this year.
Often referred to as the ‘Warren Buffet of India’, Jhunjhunwala has stayed with Titan stock since 2015. Data available from BSE showed that Rakesh Jhunjhunwala along with his wife owned more than 5 percent of the company as of March 31, 2022. On the other hand, the country’s largest institutional investor Life Insurance Corporation of India has a 3.15 percent stake in Titan.
Market observers say continued outflows from foreign institutional investors, geopolitical tensions and mounting concerns about inflation weighed on market sentiment. Meanwhile, in May, the company reported a 7.21 percent decline in consolidated net profit of Rs 527 crore in the fourth quarter ended March 2022. It had posted a net profit of Rs 568 crore in the January-March quarter of FY21.
Total income increased by 4.25 percent to Rs 7,872 crore during the reporting period, compared to Rs 7,551 crore in the corresponding quarter last year. Titan’s revenue from sales of products or services fell 1.14 percent to Rs 7,267 crore in the fourth quarter of FY22, compared to Rs 7,351 crore a year ago.
Titan Stock: What Should Investors Do?
However, analysts are optimistic about Titan’s future stock due to its robust balance sheet and strong market presence.
ICICI Securities said in a report: “Income momentum for Titan’s jewelry division slowed in Q4FY22 due to Covid-induced disruptions and a sharp rise in gold prices in March, leading to customer purchase delays. Despite this, the company outperformed other jewelers and continued to gain market share. Management indicated that demand trends in April were encouraging and in line with the company’s objectives.”
Axis Capital last month upgraded the stock to ‘Reduce’ from a ‘Sell’ rating with a target price of Rs 2,050. The brokerage said the recent correction has lowered Titan’s premium to its historic P/E band,” it said.
Santosh Meena, Head of Research, Swastika Investmart Ltd. said: “Titan is trying to build a base around the 2,050 level after a healthy correction, but 2,300-2,350 is a critical area of resistance as a cluster of key moving averages. Therefore, 2,050-2,350 is a well-defined trading band and if it succeeds it will level of 2,350, we can expect new bullish momentum, while if it falls below the 2,050 level, it will be the next sacred support level, 1900. Existing investors should keep this stock as the long-term structure is still bullish, while can start accumulating from the current level.”
Shares of Titan Company remain Motilal Oswal’s top pick in the large cap consumer space in India, with strong earnings growth visibility and up ~20 percent for a long period of time. “In the jewelry industry, which is organizing at a rapid pace, Titan is clearly at the forefront of organized players to lead this growth. The runway for growth is long, with a market share of just 6 percent,” the brokerage said in its report last month. It maintained a “buy” recommendation for the stock with a price target of rupees 2,900, which represents upside potential of 39 percent.
The expert opinions and investment tips in this News18.com report are their own and not the website’s or its management. Users are advised to contact certified experts before making any investment decisions.
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