rakesh jhunjhunwala: Big Bull’s top stocks give mega puzzle: Some cut price targets, others up them


NEW DELHI: Three of ace investor Rakesh Jhunjhunwala’s biggest holdings – , and Lupin – are worth Rs 10,000 crore today. The Big Bull has mildly lowered his holding in Titan, but maintained it in the remaining two over the past couple of quarters.

Here’s what brokerages have to say on these stocks post March quarter earnings:

Titan: Target range Rs 1,300-1,830

Jhunjhunwala’s biggest stock bet hit an all-time high of Rs 1,713.25 on Monday and enjoyed a market value close to Rs 1.5 lakh crore. Jhunjhunwala and his better half, Rekha Jhunjhunwala, own a 5.1 per cent stake in the company worth Rs 7,630 crore.

A major highlight of Titan’s March quarter earnings was a miss on jewellery segment margin for the third straight quarter. Other highlights included a recovery in the watches segment (flat sales growth YoY) and a smart 18 per cent sales growth in the eyewear segment.

Analysts, who see Titan as a structural story (on market share shift from unorganised to organised sector) and expect a strong rebound for the jewellery segment, suggest price targets of Rs 1,800 and beyond for the stock. Those who are concerned over stiff competition, weak gross margins, store closures and postponement of weddings, assign the stock price targets as low as Rs 1,300.

Motilal Oswal sees the stock at Rs 1,785 and Prabhudas Lilladher at Rs 1,663. Sharekhan expects pent-up demand to help Titan post a rapid recovery. This brokerage has a target of Rs 1,710 on the stock. finds the stock worthy of Rs 1,800, as it sees Titan as a key beneficiary of Indian jewellery market’s shift from the unorganised to organised hands.

HDFC Institutional Equities has a price target of Rs 1,300 on the stock, as it felt that Titan’s relative market share gain has been immaterial so far.

Titan ended up reporting a 15 per cent growth in the jewellery business in FY21. The jewellery maker reported a 48 per cent year-on-year expansion in March quarter profit to Rs 529 crore on a 61 per cent growth in revenue from operations to Rs 7,135 crore.

Tata Motors: Target range Rs 280-450

The automaker’s unexpected Rs 7,605 crore loss for March quarter surprised many. Tata Motors is expecting near-term challenges in both domestic and foreign businesses due to shortages of semi-conductors and the ongoing second wave of the Covid-19 pandemic in India. But analysts have largely stayed positive on the stock.

They have price targets of up to Rs 450 against Monday’s closing price of Rs 345.50. CLSA and Edelweiss see the stock at Rs 450 and Rs 432, respectively. Sharekhan and Elara Capital have targets of Rs 430 and Rs 392.

Notwithstanding short term hiccups, Sharekhan is factoring in an improvement in operational performance across businesses, a positive outlook for JLR and robust free cash flow generation, leading to a significant fall in debt.

Edelweiss said FY22 guidance for JLR is ultra-conservative and might be factoring in near-term uncertainty over semiconductor shortage and commodity inflation. “India and JLR are on the cusp of a strong demand cycle and product cycle tailwinds. This should facilitate balance sheet improvement,” the brokerage said.

Select brokerages such as Morgan Stanley and Prabhudas Lilladher, meanwhile, have sub-Rs 300 targets for the stock.

The automaker has been holding meetings with top investors like Rakesh Jhunjhunwala’s Rare Enterprises and Blackrock Investment, among others, this week. Jhunjhunwala has held 1.3 per cent stake in the Tata Group firm for three quarters now. His stake was worth Rs 1,480 crore at Monday’s price.

Lupin: Price targets Rs 1,080-1,442

Lupin’s Q4 revenues and Ebitda lagged Street estimates but lower-than-expected depreciation/tax led to profit beat. Analysts are worried over the stock’s valuation, which is commanding a significant premium to its five-year average.

While most brokerages did upgrade price targets for the stock, it has already crossed many of those targets at Monday’s close of Rs 1,233 apiece. Those included Jefferies’ target of Rs 1,096, CLSA’s target of Rs 1,080 and HSBC’s target of Rs 1,130.

CLSA said key positives are already priced in and that a patchy execution record would keep earnings downgrade risk high. Morgan Stanley and Nomura India, meanwhile, are upbeat of the stock with targets of up to Rs 1,442.

“Niche US launches and cost controls are driving the margin recovery thesis for Lupin. We expect this trend to continue for the next 2-3 years, leading to strong earnings growth,” Morgan Stanley said.

“We continue to remain positive on Lupin’s ability to execute and monetise its complex pipeline in the US. We factor in 460 bps margin improvement and 40 per cent earnings CAGR over FY21-23, driven by operating leverage. However, at 31 times FY22EPS, the positives appear priced in,” HDFC Institutional Equities said.

Jhunjhunwala owned 1.6 per cent stake in the drug maker worth Rs 890 crore at the end of March quarter.



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