Titan shares slip into red, but Rakesh Jhunjhunwala has already made this much from the stock since April


Ace investor Rakesh Jhunjhunwala’s favourite stock Titan Company Ltd, yesterday announced its March quarter earnings, beating street estimates as despite a fall in revenue the EBITDA margins were seen to be healthy. Investors were seen rushing to buy the stock as the prices jumped 4% on Monday, however profit booking saw the share price fall 3% Tuesday morning. However, the 17% jump Titan Company shares have seen so far this fiscal year has already helped Rakesh Jhunjhunwala pocket profits of close to Rs 800 crore. The stock was trading down by 3% at Rs 1,000 per share after the initial hour of trade.

Often referred to as the big bull of the Indian stock markets, Rakesh Jhunjhunwala has been bullish on Titan shares since the Benchmark S&P BSE Sensex was seen hovering around 4,500 points. He along with his wife Rekha Jhunjhunwala holds 4,90,50,970 shares in the company as per shareholding records available on the S&P BSE Sensex. The total worth of shares held by Rekha and Rakesh Jhunjhunwala stood at Rs 4,228 crore as on April 1, when Titan shares were trading at Rs 862 apiece, down 25% year-to-date. The investment value of the couple has now grown on to sit at Rs 5,027 crore, at the end of trading on June 8. Translating to a gain of Rs 799 crore.

Although the big bull might have already made Rs 799 crore from Titan Company shares this fiscal he is still trying to recoup the losses that he has made from the stock so far this year. The shares of Titan, a Tata Group company, saw a 40% decline in value between the middle of February and the end of March when share markets nose-dived fearing the spread of coronavirus. Rekha and Rakesh Jhunjhunwala brought their shareholding down in the stock to 5.53% selling 1 crore shares in the January-March quarter.

The company recorded lesser other expenses as a percentage of sales, while ad spends were also lower 80 basis points on year or 2.1%, according to brokerage and research firm Motilal Oswal. These were offset by higher staff costs as a percentage of sales 20bp on-year to 6%. Thus, EBITDA margins were up 380bp YoY to 13% in the March quarter. “As per management, a lot of its costs were compressed in anticipation of the disruption. Titan seems to have been the only company in the space to have achieved that in March itself – all other consumer peers opined that costs of that month could not be pulled back since a lot of them were already pre-committed, and the exercise of rationalising costs came into play only from April’20 onwards,” JM Financials noted. The brokerage firm has a HOLD rating on the stock.

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