Rakesh Jhunjhunwala portfolio: This auto stock can show potential upside of 40% in coming months, says expert

Rakesh Jhunjhunwala portfolio auto stock has the potential to clock almost 40% returns in coming months, as per an expert. The billionaire investor had re-entered this counter in April-June period after exiting from the stock in the March 2022 quarter. The billionaire investor had bought over 18 lakh shares of the tractor manufacturer in the quarter ended on June 30, 2022.    

Fondly called 'Big Bull' of the Indian market, Jhunjhunwala holds 18,30,388 shares or 1.39% stake in Escorts Kubota. Earlier, the celebrity investor held 5.2% stake in the leading tractor and farm machinery manufacturer Escorts, which rebrand itself as “Escorts Kubota Limited, in the quarter ended December 31, 2021. 

As a result of the Kubota group purchasing a stake in escorts, they have now become an MNC, and their R&D and product line will meet global standards, as per Ravi Singhal, CEO, GCL Securities.  

"This will help to increase revenue and market share in the future. On the other hand, new export opportunities will also emerge. For this counter, 1450 is a strong support level, but it has the potential to rise to 2100, 2300 in the coming months," he added.  

Kubota stock rose up to 258.02% in the last 3 years and gave a 3-year return of 245.41%, primarily because the company is debt free for the first time in the last five years, said Manoj Dalmia, founder and director, Proficient equities Private limited.  

He said liability growth percentage reduced consecutively for the last 2 years and spent less than 1% of its operating revenues for interest expenses. Revenue for June 30 2021 and 2022 was 1101.4 and 1260.5 respectively. "A target price of Rs.1650 is recommended," said Dalmia. 

Escorts Kubota has shown good move in the past mainly due to healthy growth in agricultural sector, says Ravi Singh, vice President and head of Research, Share India.  

However, now the share of the company is trading in overbought zone and may see some correction in coming trading sessions due to higher valuations, higher production cost, decline in tractor sales and subdued earnings growth, said Singh.  

"The stock may witness selling pressure to touch the levels of 1400 in the near term," he added. 

As per the latest corporate filings, Rakesh Jhunjhunwala holds as many as 32 stocks in the June quarter. Rakesh Jhunjhunwala portfolio net worth is estimated to be around Rs 31,279.3 crore as on August 2, according to stock market analysis portal trendlyne.com.   

Shares of Escorts Kubota rose marginally by Rs 3.50 to 1647.20 per share on the BSE on Monday. The equity market remains closed on Tuesday due to Muharram.