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Rakesh Jhunjhunwala made Rs 284 crore with this stock in just six years

Updated : November 25, 2019 01:49 PM IST

Jhunjhunwala first bought 50 lakh shares of the company in the September 2013 quarter.

In September 2013, the stock was trading around Rs 80, hence the 50 lakh shares would have been worth around Rs 40 crore.

At the current value of Rs 648, the 50 lakh shares bought in 2013 is now worth Rs 324 crore, giving him a profit of Rs 284 crore.

Rakesh Jhunjhunwala made Rs 284 crore with this stock in just six years

Tractor maker Escorts has been a favourite stock of ace investor Rakesh Junjhunwala since 2013.

Jhunjhunwala first bought 50 lakh shares of the company in the September 2013 quarter. He then increased it to 1.12 crore shares (over 9 percent stake in the company) in December 2015 and finally sold 12 lakh shares to own 1 crore shares of the company, amounting for 8.16 percent stake in the company in the December 2017 quarter.

In September 2013, the stock was trading around Rs 80, hence the 50 lakh shares would have been worth around Rs 40 crore. At the current value of Rs 648, the 50 lakh shares bought in 2013 is now worth Rs 324 crore, giving him a profit of Rs 284 crore.

At one crore shares (which he currently holds), the stock is worth Rs 648 crore currently.

However, the stock has fallen 2 percent in the last one year and 8.2 percent in 2019 amid the ongoing slowdown, which massively affected the auto industry. Other auto stocks like M&M, Ashok Leyland, Bharat Forge, Hero MotoCorp, TVS Motor Company and Tata Motors also fell over 10 percent in the last 1 year.

For Q2, Escorts reported a marginal rise in its consolidated September quarter (Q2FY20) net profit at Rs 101.5 crore against Rs 101.2 crore in the same quarter last year. The revenue of the company was down 5.6 percent at Rs 1,334 crore versus Rs 1,412.5 crore.

While maintaining a 'buy' rating on the stock, HSBC cut its target price to Rs 770 per share from Rs 980 earlier post its Q2 results. According to the brokerage, tractor demand is likely to bottom out in the second half of FY20. It added that states like UP, Maharashtra, and Gujarat are likely to do well post-monsoon.

The company reported a 1.6 percent increase in tractor sales at 13,353 units in October. The company had sold a total of 13,140 units in the same month last year, Escorts Ltd said in a regulatory filing.

Domestic tractor sales last month were at 13,034 units, compared to 12,867 in October 2018, a growth of 1.3 percent, it said. Exports stood at 319 units as compared to 273 in the same month last year, a growth of 16.8 percent, the company said.

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