This Rekha Jhunjhunwala-backed specialty stock could double your investment; part of your portfolio? Check price target

Rekha Jhunjhunwala Portfolio: Ace investor Rekha Jhunjhunwala-backed specialty chemical company – Jubilant Ingrevia shares are likely to double from the current levels, brokerages believe, while citing positive triggers. The stock since its listing in March 2021 has surged almost 88 per cent to Rs 510 levels on the BSE. 

On Thursday, the counter is trading weak down near 1 per cent to Rs 509 per share on the BSE, as against 0.59 per cent fall in the S&P BSE Sensex at around 12:30 PM. 

Rekha Jhunjhunwala, wife of billionaire investor Rakesh Jhunjhunwala, personally holds 25,20,000 equity shares or 1.58 per cent stakes on Jubilant Ingrevia, as of June 2022 quarter shareholding pattern of the company is available on the BSE. 

The celebrity investor couple jointly holds 75,20,000 equity shares or 4.7 per cent stakes in the specialty company, as per the latest shareholding pattern. 

Jubilant Ingrevia management is confident of doubling revenue in three-four years on the back of capex. and believes overall EBITDA margin and RoCE would improve with specialty chemicals potentially driving large part of this growth, Edelweiss Research said in its report. 

The balance sheet shall stay strong since a large part of this capex would be funded from internal cash flows, the brokerage said, believing that it’s on the cusp of a transformation with specialty chemicals catalysing overall growth while commodity-led business would keep churning strong cash.  

At an attractive ~15x FY24E EPS, Edelweiss Research maintained a Buy rating with a target price of Rs 1,006 per share, which translates to an upside of around 96 per cent from current levels. 

Domestic brokerage firm Monarch Networth Capital believe Jubilant Ingrevia can grow on an FY22 base, on the back of the new capex initiatives commercialising over FY23/FY24. It is attractively placed at around 6x payback period on cash profit of FY25E which gives an attractive reward potential, it said. 

The brokerage also maintains a Buy rating with a target price of Rs 890 per share in long term, valuing Ingrevia at 12x FY24E EV/EBITDA, which implies an almost 62 per cent upside.