BackRakesh Jhunjhunwala's wealth rises ₹1,061 cr in these 2 stocks in a day. Should you buy?
In value terms, Jhunjhunwala who is often referred to as the Warren Buffett of India, records most earnings from these two stocks. Notably, both Titan and Star Health are seen as money-making stocks ahead.
PremiumMajority of stocks in ace investor Rakesh Jhunjhunwala's portfolio witnessed bullish sentiment on Thursday, however, two of his most valued stocks increased his wealth by a whopping nearly ₹1,061 crore in a single day. These two stocks are Titan Company and Star Health & Allied Insurance. In a day, Titan shares skyrocketed by nearly 8% and Star Health climbed by little more than 16% before they corrected slightly in the closing hours. In value terms, Jhunjhunwala who is often referred to as the Warren Buffett of India, has most of his net worth coming from these two stocks. Notably, both Titan and Star Health are seen as money-making stocks ahead.
On BSE, Titan shares closed at ₹2,128 apiece up by ₹114.60 or 5.69%. The shares have hit an intraday high of ₹2,170.95 apiece - resulting in a gain of 7.8% so far in the day compared to the previous closing.
Titan's market valuation stands at ₹1,88,920.89 crore. In a year, Titan shares have jumped by more than 23%, however, the growth was pulled back from March this year due to the deep depression in broader markets amidst macroeconomic risks. Titan shares have a 52-week high of ₹2,767.55 apiece and a 52-week low of ₹1,661.85 apiece.
As per the shareholding pattern of Titan, as of March 31, 2022, Rekha Jhunjhunwala holds 95,40,575 equity shares or 1.07%. Meanwhile, Rakesh Jhunjhunwala's shareholding in Titan stands at 3,53,10,395 equity shares or 3.98%. Cumulatively, the couple holds 4,48,50,970 equity shares or 5.05%. Rakesh manages both his and wife's portfolio.
Due to stellar performance in Titan shares today, Jhunjhunwala's wealth in Titan increased by at least ₹513.99 crore (4,48,50,970 X ₹114.60) in the day.
Titan shares rose today due to its strong sales figure in business verticals for the quarter ending June 2022 (Q1FY23) period. Titan posted a 205% jump in Q1 sales attributed to a low base. Further, the company recorded a 3-year CAGR of 20.5% over Q1FY20, the only non-disrupted first quarter in the last 3 years. All divisions witnessed a strong performance in the quarter.
Meanwhile, on BSE, Star Health shares advanced by ₹54.25 or 11.40% and closed at ₹530.20 apiece. The shares had touched an intraday high of ₹554.20 apiece - registering a gain of at least 16.4% in a single day before correcting. The company's market cap is about ₹30,544.83 crore.
Coming to Star Health, unlike Titan, the general insurance company has dropped significantly since its IPO in December last year. Star Health stock had hit a 52-week high of ₹940 apiece in December but witnessed a downturn thereon. However, the shares are recovering and analysts are optimistic about the company going forward.
Since market debut, Star Health shares have dived by 41.5%.
As of March 31, 2022, Rakesh holds 82,882,958 equity shares or 14.40% in Star Health, while his wife Rekha holds 17,870,977 equity shares or 3.11% in the company. Together, the couple's shareholding in Star Health is around 100,753,935 equity shares or 17.5%.
Taking into consideration today's performance, Rakesh's wealth climbed by ₹546.59 crore (100,753,935 X ₹54.25) in Star Health in the day.
From the two stocks, Rakesh bagged approximately ₹1,060.58 crore in just one day.
According to Trendlyne data, as of today, Rakesh's net worth in Titan is around ₹9,542 crore, and in Star Health at around ₹5,359.1 crore. These two are top stocks in Jhunjhunwala's portfolio.
As of July 7, the data showed that Jhunjhunwala's overall portfolio is valued at ₹26,484.16 crore. That said, his wealth in Titan and Star Health accounts for half of the overall portfolio valuation. Titan accounts for over 36% of Jhunjhunwala's total portfolio wealth, while Star Health accounts for over 20% of the total net worth. Rakesh publicly holds 33 stocks on the exchanges.
Should you buy Titan and Star Health shares?
On Titan's Q1FY23 update, Shirish Pardeshi, Research Analyst, Consumer at Centrum today said, "We believe deferred weddings due to Omicron wave inQ4 pushed pent up demand coupled with festival demand drove strong footfalls."
Going forward, the Centrum analyst said, "We expect continued strong revenue momentum for jewelry led by forthcoming festive season being strong due to deferred weddings from Q4, as customers have postponed the purchases due to rising gold prices in Q4. We expect with geo-political issues to be settled soon, reflecting commodity prices to fall, that could induce advance purchases for future. Nonetheless, mandatory hallmarking is taking speed and will have positive impact benefiting organised players like Titan. We remain positive and expect strong demand conditions across divisions to drive revenues and margin expansion. We retain BUY, with a DCF-based TP Rs2,817 (implying 69.5x FY24E EPS). Risks – irrational completion, higher gold prices."
Research analysts Ansuman Deb and Ravin Kurwa at ICICI Securities for Star Health in their note said, "We value the stock with a revised target price of Rs700 based on 40x (earlier 50x) FY24E EPS of Rs17.5 (earlier 16.7). We factor GDPI CAGR of 16.5% between FY22-24E, investment leverage of 2.3x in FY24E, combined ratio of 95%, and investment yield of 7% for FY24. Our change in multiple reflects the possibility of heightened competition, subsequent covid waves, and overall increase in the cost of capital."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
