ET Markets
12,242.0561.7
Stock Analysis, IPO, Mutual Funds, Bonds & More

12 Jhunjhunwala stocks tanked 20% to 90% in Samvat 2075; others rallied up to 90% to make up

Jhunjhunwala took the biggest knock in Dewan Housing Finance Corporation (DHFL).

, ETMarkets.com|
Oct 25, 2019, 10.42 AM IST
0Comments
BCCL
Jhunjhunwala-2---BCCL
Samvat 2075, the traditional Hindu accounting year which ends on Saturday, proved very disappointing for India’s biggest individual investor Rakesh Jhunjhunwala.

Subdued performance of the equity market amid a crippling economic slowdown dealt a big blow to the Big Bull with about a dozen of his portfolio stocks eroding value in large proportions.

BSE Sensex advanced nearly 11 per cent between the last Diwali on November 7, 2018, which marked the start of the Samvat year, and October 23, 2019, mainly on the strength of brisk buying in select blue chip stocks. In the broader market, the BSE Midcap declined 3 per cent and BSE Smallcap index 9 per cent.

Jhunjhunwala, often referred to as India’s own Warren Buffett, took the biggest knock in Dewan Housing Finance Corporation (DHFL), whose shares declined 91 per cent during the Samvat year. RJ held 2.46 per cent stake in the company as of September 30, 2019 against 3.20 per cent in the same quarter last year.

The mortgage lender has been smarting under a major liquidity crunch since last September, but has still managed to clear some Rs 41,000 crore financial obligations through a combination of securitisation of assets and repayment collections.

Besides Jhunjhunwala, there were other 3.30 lakh individual shareholders (including HNIs) in DHFL as of September 30, 2019. They held more than 11 crore shares, or 35 per cent, stake in the company.

Some of RJ’s other top favourites also suffered during the year. The Mandhana Retail Ventures, Autoline Industries, Edelweiss Financial Services, Bilcare, Geojit Financial Services, TV 18 Broadcast, Man Infra Construction and Delta Corp fell between 20 per cent and 70 per cent between November 7, 2018 and October 23, 2019.

Brokerage firm Motilal Oswal Financial Services recently gave a ‘buy’ rating on Delta Corp with a price target of Rs 254. “Post a sharp correction, the stock is now attractively valued at 17 times FY21E EPS. While GST-related hangover remains, the operational performance is intact and it will likely improve from here on,” the brokerage said.

Among others, Firstsource Solutions (down 11.87 per cent), Orient Cement (down 11.21 per cent) and Crisil (down 8.55 per cent) also eroded Jhunjhunwala’s wealth during Samvat 2075.

But then, some of his other holdings delivered big gains to cushion the hit from the laggards.

ION Exchange rose as much as 90 per cent, Multi-Commodity Exchange gained 66 per cent, Titan 59 per cent and SpiceJet 43 per cent. Agro Tech Foods remained almost flat.

Global brokerage HSBC Global Research on October 7 came out with a ‘buy’ recommendation on Titan with a revised price target of Rs 1,410 against Rs 1,450 earlier.

“Titan’s Q2 operating statement suggests retail jewellery sales grew by 15 per cent in August-September, after de-growth in July. This boosts confidence that Titan can weather the demand weakness with various offers and deliver stronger growth in H2,” HSBC said.

Jhunjhunwala continues to hold more than 1 per cent stake in all the above-mentioned companies since last Diwali.

In a recent interaction with ETNow, Jhunjhunwala said he now sees a good opportunity in PSU stocks. “The biggest beneficiaries of the corporate tax cut will be the public sector.”

He also said the market may have bottomed out. “I have never seen such volatility in 70 years, but selectively, I feel the market has bottomed out,” he said.

For Samvat 2076, analysts sounding bullish on the prospects of Indian equities. Analysts from 14 leading brokerages, who took part in the ETMarkets Samvat Survey, projected Sensex and Nifty to rise between 7 per cent and 13 per cent in the new Hindu accounting year. This would be similar to the 10-11 per cent return that the two indices delivered in the Samvat year gone by.

Brokerage HDFC Securities projects Nifty at 12,700 and Sensex at 42,800 by next Diwali. Karvy Stock Broking says Nifty can hit 14,250 and Sensex 46,000 by then.

Also Read

Jhunjhunwalas buy more in Titan

Jhunjhunwala, MFs, FPIs raise stake in this midcap hospital chain

Wedding bells: Avni Biyani to tie the knot with Advay Jhunjhunwala in March

This Jhunjhunwala stock climbs in a weak market as gold glitters

YES Bank rallies 6% as Jhunjhunwala picks stake

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service