Banking stocks are up 75% in a year after Rakesh Jhunjhunwala’s stake purchase. More upside down left? | Techy Kings


Portfolio of Rakesh Jhunjhunwala: The start of a new quarter is not just the arrival of results season that retail stock investors look forward to. In fact, some of them wait for the stock holding patterns of the ace investors because it helps them know the smart money trends. Some retail investors scan ace investor portfolios for value picks as well. For such investors, there is a piece of stock market news.

One of Rakesh Jhunjhunwala’s portfolio stocks Canara Bank has delivered nearly 75 percent returns to its shareholders since the ‘Big Bull’ acquired a stake in this PSU bank in the July to September 2021 quarter. Rakesh Jhunjhunwala’s name first appeared in Canara Bank’s shareholding pattern in Q2FY22 where he was found to hold around 1.60 percent interest in PSU shares.

Canara Bank share price history

According to Canara Bank’s shareholding pattern for the quarter of July to September 2021, Rakesh Jhunjhunwala holds 28,850,000 Canara Bank shares, which is 1.59 percent of the PSU bank’s total paid-up capital. As the shareholding pattern does not provide transaction details, we take the initial price of Canara Bank shares at the beginning of July 2021. At the beginning of July 2021, the share price of Canara Bank was at 155 each and today Canara Bank share price fluctuates 270 per level. This means, Rakesh Jhunjhunwala’s portfolio shares have soared 115 per share, logging increased by almost 75 percent within one year. Or in other words, Canara Bank shares have increased by around 75 percent in almost a year after the acquisition of stake by Rakesh Jhunjhunwala.

Rakesh Jhunjhunwala’s shareholding in Canara Bank

As mentioned above, Rakesh Jhunjhunwala held a 1.59 percent stake in the stock at the end of the September 2021 quarter which he kept unchanged at the end of the December quarter 2021. But in the January to March 2022 quarter, Rakesh Jhunjhunwala increased his stake in the state-owned bank to 1.96 percent and remained stable in the April to June 2022 quarter. However, in the July to September 2022 quarter, Rakesh Jhunjhunwala’s holding decreased to 26,847,400 Canara Bank shares or 1.48 percent of the bank’s total paid-up capital.

Canara Bank share price survey

Despite the huge rise in Canara Bank shares, some brokers are still bullish on Canara Bank shares. They believe that the bank’s loan book will fatten at a CAGR of nearly 20 percent and expect it to increase to 330 per level in the long run.

Giving a ‘buy’ signal to Canara Bank shares, LKP Securities said, “Factoring short-term capital inflows, we expect the bank’s loan book to grow cautiously at a CAGR of ~20 per cent over FY22-24E, led by RAM and corporate book growth. In our opinion, bank credit costs will return to normal by FY23E and estimate a ROA/ROE return ratio of 1.2 percent and 18.9 percent in FY24E. We value the standalone entity with 0.6xFY24E BVPS ( 538) and arrived at a target price of 323. We recommend BUY with a potential upside of 19 percent.”

Giving a ‘buy’ tag to this Rakesh Jhunjhunwala portfolio stock, Emkay Global has given a long-term target 330 per share.

Disclaimer: The views and recommendations made above are the views of individual analysts or brokerage firms, and not of Mint.

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