Ace investor Rakesh Jhunjhunwala-owned Tata Communications share has more than doubled in the last one year. The stock, which closed at Rs 393.15 on February 20 last year, ended at Rs 1,010 in trade today, clocking 156% returns during the period. An amount of Rs 1 lakh invested in the large cap stock on February 20 would have turned into Rs 2.56 lakh today. In comparison, Sensex has gained 20.83% and Nifty has risen 21.48% in a year.
Rakesh Jhunjhunwala, often referred to as Big bull of Dalal Street, bought shares of the firm in the December quarter of FY21.
Jhunjhunwala's wife Rekha Jhunjhunwala held 32,00,687 shares or a 1.12% stake in Tata Communications at the end of Q3, according to BSE data.
Buoyed by the entry of Jhunjhunwala as one of its shareholders, the stock of the firm gained 10% on January 12 this year when shareholding pattern for Q3 was disclosed.
Mutual funds (MFs) too raised their stake in the company to 11,76,747 shares or 0.41% during the December quarter from 10,97,017 shares or 0.38% in the September quarter, while foreign portfolio investors (FPIs) raised their stake 17.65% with 5,02,95,885 shares in Q3 from 17.56% with 5,00,53,794 shares in the earlier quarter.
In today's trade, the stock gained after 2 days of consecutive fall. It touched an intraday high of Rs 1046.6 rising 4.3%. Later, the stock closed 0.65% higher at Rs 1,010 on BSE.
The share stands higher than 100 day and 200 day moving averages but lower than 5 day, 20 day and 50 day moving averages. Market cap of the firm stood at Rs 28,785 crore on BSE.
The share has fallen 7.61% since the beginning of this year
A fall in Coronavirus cases across the world, launch of several Covid-19 vaccines, value buying at low levels and constant improvement in earnings have led to the meteoric rise in the stock in one year.
In Q3 of the currrent fiscal, the firm reported a five-fold jump in consolidated net profit at Rs 309.41 crore against profit of Rs 58.85 crore in the corresponding period of the preceding fiscal.
In Q2 of the previous fiscal, the Tata Group firm reported a profit of Rs 386 crore against profit of Rs 52.52 crore in the corresponding period of previous fiscal.
In Q1 too, the firm maintained its positive earnings momentum and reported a profit of Rs 258.58 crore against profit of Rs 74.86 crore.
In December last year, Tata Communications announced the acquisition of 58.1 per cent stake in France-based Oasis Smart SIM Europe SAS (Oasis). Oasis develops and provides advanced technologies and personalised services to enable deployment of eSIM and SIM technologies. The development was a big positive for the stock.
Tata Communications share gained 9.3% to Rs 1,144.95, a fresh all-time high, against previous close of Rs 1048.35 on December 24. Market cap of the firm rose to Rs 30,933 crore.
In a report dated January 21, 2021, brokerage ICICI Direct maintained BUY call with a revised SoTP target price of Rs 1210/share, rolling over valuations to FY23E.