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Wednesday, October 27, 2021

Jhunjhunwala Portfolio: This stock of Jhunjhunwala’s portfolio has gained 180% this year, experts gave buy advice

Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala hold more than 10 million equity shares of Jubilant Ingravia, which is equivalent to about 6.29 per cent stake in the company.

Jhunjhunwala Portfolio: A stock included in the portfolio of veteran investor Rakesh Jhunjhunwala, who is called Warren Buffet of India, has gained 180 per cent in 2021 this year. This has helped Jhunjhunwala strengthen his portfolio at a rapid pace in Jubilant Ingrevia, a life sciences ingredients company. Brokerage firm HDFC Securities believes that the stock may continue to rise further and has given it a buy rating of 12 per cent i.e. at a target price of Rs 844.

Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala hold more than 1 crore equity shares of this company which is equivalent to about 6.29 per cent stake in the company. If we assume that Jhunjhunwala has not changed his holdings, then in July-September 2021, he had made a profit of Rs 202 crore during this period. In July-September 2021, Jubilant Ingravia had gained 44 per cent.

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Strong signs of uptrend in the stock

  • Jubilant Life Sciences had received NCLT approval to create separate entities for Pharma and Life Science Ingredients. After this Jubilant Ingravia was made. Jubilant Engravia has three verticals – Specialty Chemicals, Nutrition & Health Solutions and Life Science Chemicals.
  • In the last financial year 2020-21, the revenue of Life Science Chemical business grew by 13 percent while the business of Nutrition and Health Solutions grew by 17 percent on a year-on-year basis.
  • HDFC Securities believes that the company is in a sector where it is very difficult to start a new company due to the high focus mainly on R&D (Research and Development) and the demand for more time to penetrate among the customers.

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  • Analysts at the brokerage firm estimate its revenues to grow at a CAGR (compound annual growth rate) of 14.5 per cent due to double-digit growth across all verticals of the company. HDFC Securities has estimated the company’s EBITDA to grow at a CAGR of 20.5 per cent and PAT (Profit After Tax) at 28 per cent in FY 2021-2023, based on strong margins and low financing costs.
  • Jubilant Ingravia is expected to benefit from strong demand, healthy market share, strong capital expenditure program in the medium term and new product launches and China+1 policy by companies across the world.
  • In base case, HDFC Securities estimates that the stock may touch a target of Rs 795. However, in the bull case, the brokerage firm has set a target price of Rs 844 per share for investing in it, that is, there is a golden chance of getting a return of about 12.6 percent from the current price.
    (Article: Kshitij Bhargava)
    (The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)

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