Wealth creator: Rakesh Jhunjhunwala's top pick turned Rs 10,000 to over Rs 3.55 lakh in 15 years
The growth in share price indicates that an investment of Rs 10,000 in Titan Company in 2006 would have now become over Rs 3.57 lakh.
The domestic equity market has given many opportunities to investors to accumulate humungous wealth over the past 15 years even as several headwinds haunted Dalal Street one after another, from the Global Financial Crisis to the current Covid-19 pandemic.
Jewellery-to-watch maker Titan Company is one such player which has changed the fortunes of many investors including ace equity investor Rakesh Jhunjhunwala. Shares of the company have risen 3,475% to Rs 1407 on February 26, 2021 from Rs 39.36 on February 28, 2006.
The growth in share price indicates that an investment of Rs 10,000 in Titan Company in 2006 would have now become over Rs 3.57 lakh. Jhunjhunwala together with his wife held a 5.32% stake in Titan as of December 31. They had a 5.56% stake in the mid of 2006. On the other hand, the shareholding of small investors declined to 8.93% from 16.83% during the same period.
Consolidated net sales of the company have grown at a CAGR of 19.25% during FY2006-20, while profit after tax grew 19.81% annually during the same period.
Going ahead, brokerage sees more than 10% in Titan Company in the next 12 months. IIFL Securities has an ‘Add’ call on the company with a price target of Rs 1,600.
“The company expects to gradually gain market share in jewellery driven by the adoption of a localised approach (many Indias), leverage the strong brand name of Tanishq and the trust it evokes, product innovation and accelerated digitisation. Management opined that watches remain an exciting division with strong customer demand seen for both analog and wearables,” the brokerage said in a report.
Geojit Financial Services also has ‘Buy’ on Titan Company with a price target of Rs 1,643.
“The strong recovery in demand, especially from the jewellery segment (across coins, studded and wedding jewellery), month-on-month improvement in walk-ins for watches and eye-wear segments should further increase the recovery rates. Further company’s efforts to optimise inventory levels and various cost measures should help improve margins. Hence, we reiterate our Buy rating on the stock,” Geojit Financial Services said.