Ace investor Rakesh Jhunjhunwala and his wife have earned Rs 483.75 crore from their investment in Titan Company stock in the last four trading sessions. Currently, the couple holds Titan shares worth nearly Rs 6,968.12 crore. Rakesh Jhunjhunwala who held 5.75% stake (5.10 crore shares) in the firm at the end of June quarter is sitting on a profit of Rs 394.74 crore. His wife Rekha Jhunjhunwala who owns 1.30% (1.15 crore shares) stake has earned Rs 89.01 crore profit during the period under consideration.
Back in 2002-03, Jhunjhunwala had bought 6 crore Titan shares at Rs 3 per share. Each share is now valued well over Rs 1,000. The stock hit an intra day high of Rs 1,114.90 in trade today.
On September 4, Titan Company stock price stood at Rs 1,037.5. Titan stock has seen a rise of 7.46% or 77 points since then.The stock rallied after ratings agency ICRA, on September 5, assigned positive ratings to its commercial paper (CP ) programme. ICRA gave A1+ ratings to the company's Rs 900-crore commercial paper. Fund-based and non-fund based limits of Rs 1,700 crore under the CP programme were assigned AA + (positive) and A1 + (outstanding ) ratings by the credit ratings agency.
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.
"Titan's liquidity profile is superior with healthy cash accruals of over Rs 1,000 crore, expected annual capex outlay of around Rs 300 crore and negligible long-term debt repayment obligations. In addition, Titan had healthy cash and liquid investment reserves of over Rs 900 crore as on March 31, 2019 (excluding restricted cash and inter-corporate deposit investments)," ICRA said.
ICRA also mentioned about the firm's jewellery business, which has been gaining market share consistently.
"Titan's jewellery business has been consistently gaining market share on the back of its strategies of increasing its revenue share from wedding and high-value studded segments. Moreover, its expanding presence in geographies with low market share and enhancing customer value proposition through Golden Harvest scheme and gold exchange programme has increased its revenue base."
Positive ratings for the stock price ahead of the festive season augur well for the leading jewellery manufacturing firm which saw major weakness nearly two months ago.
On July 9, the stock crashed 13.14% intraday and touched a low of Rs 1,088.05 compared to the previous close of Rs 1,252.65 after the firm said its consumption had taken a hit in the first quarter of the current fiscal. The company's shareholders lost over Rs 15,000-crore wealth with its market capitalisation falling to Rs 96,058 crore on July 9 compared to market capitalisation of Rs 1,11,208 crore on the previous day. Since then, the large cap stock has been trading below Rs 1,200 on BSE.
The maker of Titan watches and Tanishq jewellery reported a 10.84% rise in consolidated net profit at Rs 363.74 crore in the quarter ended June compared to net profit of Rs 328.15 crore in the corresponding quarter last year.