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Why Rakesh Jhunjhunwala-owned Titan Company share has gained 12% in 10 trading sessions

Titan Company stock held by ace investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala has risen over 12 per cent or 129.5 points in last 10 trading sessions.

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Why Rakesh Jhunjhunwala held Titan Company share has gained 12% in 10 trading sessions
Titan Company share seems to be gearing up for big moves ahead of the festive season.

Titan Company share seems to be gearing up for big moves ahead of the festive season. Titan Company stock held by ace investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala has risen over 12 per cent or 129.5 points in last 10 trading sessions. While Rakesh Jhunjhunwala holds 5.75% stake (5.10 crore shares), his wife owns 1.30% stake (1.15 crore shares) in the maker of Titan watches and Tanishq jewellery.

On September 4, 2019, the stock stood at Rs 1,037.50. It has risen to Rs 1,167 today. The stock is steadily heading toward Rs 1,200 level from which it slipped on July 9 after the leading jewellery manufacturing firm said its consumption had taken a hit in the first quarter of the current fiscal. The stock crashed 13.14% intraday and touched a low of Rs 1,088.05 on July 9 compared to the previous close of Rs 1,252.65.

However, a series of positive developments have fuelled the rally in the stock. On September 5, ratings agency ICRA assigned positive ratings to the consumer goods firm's commercial paper (CP ) programme. ICRA gave A1+ ratings to the company's Rs 900-crore commercial paper. The firm's fixed deposit programme worth Rs 1,500 crore also received outstanding ratings from ICRA. The ratings agency cited Titan's strong liquidity position for assigning positive ratings to the stock.

The large cap stock rallied from Rs 1,037.50 on September 4 to Rs 1,114.90 on September 12, a rise of 77.6 points or 7.46%. In another positive development for the stock of the Bengaluru-based firm, a Business Standard report on September 13 said the firm plans to raise Rs 900 crore through commercial paper. Titan Company share price rose up to 3.08% intra day to Rs 1,119.91 compared to the previous close of Rs 1,085.65 on BSE.

The stock received more impetus yesterday when global research firm Morgan Stanley upgraded the stock to overweight from equal weight with a target of Rs 1,300 from Rs 1,110 per share.

"Titan remains one of our favourite long-term plays on urban discretionary consumption growth in India. However, following the strong trailing performance, we are now reluctant to push multiples beyond current levels. We see balanced risk-reward at the current stock price," the brokerage said.

Interestingly, the upgrade comes two and a half months after the brokerage downgraded Titan to equal-weight from overweight. The stock rose 2.35% intra day on September 17 to Rs 1,175 on BSE closed nearly 1% higher than the previous close of Rs 1,148.

Edited by Aseem Thapliyal

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