Rakesh Jhunjhunwala Portfolio Shares: Rakesh Jhunjhunwala owns Titan, Lupine, Escorts, Rallis India and many other stocks in his portfolio. All of these stocks have given this ACE investor multiple returns over the years. Rakesh Jhunjhunwala is known for his vision and fundamental analysis while selecting stocks for investments. In addition to the investor community, Rakesh Jhunjhunwala garners great respect from the trader community as he is also a strong trader. Big Bull Rakesh Jhunjhunwala publicly owns 37 shares with a net worth of over Rs 19,200 cr, the latest company holdings filed on the BSE showed. Rakesh Jhunjhunwala owns 1.3% of the capital or 4.27 cr shares in Tata Motors, valued at Rs 1475 cr. The Big Bull is known to buy quality stocks in its portfolio. Tata Motors was a new addition to Rakesh Jhunjhunwala’s portfolio during the Covid period. Titan is the other share of the Tata group that Jhunjhunwala holds in his portfolio.
Tata Motors is India’s largest utility vehicle company and the fourth largest photovoltaic player. In photovoltaics, the company offers products in the segments of compact and medium cars and commercial vehicles. Through subsidiaries and associates, the company operates in the United Kingdom, South Korea, Thailand and Spain. Key to them is Jaguar Land Rover, the company comprising two iconic British brands – Jaguar and Land Rover. Tata Motors markets cars, buses and trucks in several countries in Europe, Africa, the Middle East, Southeast Asia and South America. Edelweiss says the target price on Tata Motors is Rs 372.
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Strengths of Tata Motors:
Edelweiss expects demand in some of Tata Motors’ key markets to normalize, as we believe the worst is behind. In addition, tight cost control should also boost profitability. Edelweiss remains positive on JLR’s upcoming product pipeline, which will improve the mix in favor of the more profitable Land Rover brand.
Edelweiss believes the investment cycle has reached its peak, as such the reduction in capital spending should help JLR’s FCF profile as well. For the India activity, after two years of slowdown, we expect a gradual recovery in volumes. This, coupled with a strong focus on costs, should help boost profitability. The improvement in Tata Motors’ balance sheet continues to surprise positively. It is important to note that in standalone mode and in India, cash benefits continue to outweigh capital expenditures; therefore, FCF’s production is not motivated solely by better working capital.
Tata Motors Management has indicated that the generation of FCF remains the central focus. Edelweiss believes the FY22 forecast for JLR (4% EBIT and neutral FCF) is ultra conservative taking into account the short-term uncertainty (semiconductor shortage and commodity inflation). A 100,000-unit backlog for Defender, a tight leash on capital spending and the launch of RR over the next 12 months remain the main drivers.
Main risks for Tata Motors:
Macro risks (Brexit, Trade wars)
Increased competitive intensity, especially in the EV / autonomous driving space
A prolonged slowdown.