5 stocks where Jhunjhunwalas hold large stakes are market’s big bets for 2018 too

5 stocks where Jhunjhunwalas hold large stakes are market’s big bets for 2018 too

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NEW DELHI: Big Bull Rakesh Jhunjhunwala’s investment of five of his pet stocks is now worth Rs 9,150 crore. Three of them – Titan Company, Escorts and DHFL – climbed 140-150 per cent in last one year, riding the bull run, while two others – CrisilBSE 1.06 % and Lupin – failed to catch investors’ fancy.

Can these stocks be good bets for 2018 too?

Titan Company, a known Jhunjhunwala favourite, has ‘strong buy’ ratings from nine top brokerages. Sixteen others have ‘buy’ ratings, two have ‘hold’ ratings and one each has ‘sell’ or ‘strong sell’ ratings, data compiled from Reuters Eikon showed.

The ace investor and his better half, Rekha Jhunjhunwala, owned shares worth Rs 6,200-odd crore (8.06 per cent stake) in the company.

The median consensus estimate for the stock is marginally lower than the prevailing price. But a few brokerages see it as an attractive long-term bet.

The recent aggression to capitalise on opportunities across divisions is heartening. Earnings CAGR is likely to be a massive 36 per cent over FY17-20. The sheer scale of top-line opportunity demands premium valuations, says Mumbai-based brokerage Motilal Oswal Securities.

“We maintain a buy rating on the stock with a revised price target of Rs 975,” it said in a note.

Jhunjhunwala held 9.16 per cent stake in Escorts at the end of second quarter, which was worth Rs 870 crore as of Wednesday. Though not as popular as Titan, this stock has two ‘strong buy’ ratings, four ‘buy’ ratings and three ‘hold’ ratings, with just one ‘strong sell’ call. The stock traded at Rs 770 level on Tuesday against Reuters’ median estimate of Rs 811 level.

Lupin is a battered stock, the worst performer in Jhunjhunwala’s portfolio in 2017. But 16 brokerages either have ‘strong buy’ or ‘buy’ ratings on the stock. Eighteen brokerages have ‘hold’ ratings and eight have either ‘sell’ or ‘strong sell’ ratings, Reuters data showed.

The median target for the stock at Rs 894 is marginally higher than its prevailing price. Jhunjhunwala’s 1.89 per cent stake in the pharma company was worth Rs 750 crore as of Wednesday’s trading.

Most of the Indian pharma companies are sitting on a very healthy product pipeline for the USA markets, with many of them featuring among the highest ANDA filers. Apart from USA, the other export markets are growing at a healthy pace, says Angel Broking.

It said investors should go for pharma stocks, where valuations are very comfortable. The brokerage prefers Lupin and Aurobindo Pharmaceuticals. Jhunjhunwala held over 1 per cent stake in Aurobindo Pharma at the end of June quarter.

Crisil Ratings has four ‘buy’ or ‘strong buy’, one ‘hold’ and one ‘sell’ ratings, with a median target of Rs 1,996. Jhunjhunwala and his wife’s combined 5.58 per cent stake in the company was worth Rs 750 crore as of Tuesday. The stock traded at Rs 1,880 on Tuesday.

Housing finance company Dewan HousingBSE 0.20 % has eight ‘strong buy’ and ‘buy’ ratings, one ‘hold’ rating and no ‘sell’ call, as per Reuters data.

Jhunjhunwala held 3.19 per cent stake in the company as of September 30, which was worth Rs 588 crore as of Wednesday’s intraday price level. The median target for this stock is at Rs 640, while the stock trades at Rs 580-odd levels.

“Housing finance or a full-fledged NBFC like Shriram Transport, Dewan Housing are stocks we are looking at from the current levels,” Rahul Shah of Motilal Oswal Services told ETNow last week.