June 6, 2023

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Rekha Jhunjhunwala portfolio: Ace investor picks extra shares in NCC; brokerage sees 80% upside in stock

Ace investor Rekha Jhunjhunwala added extra shares in southern-based construction engineering company – NCC Limited (Nagarjuna Construction Company), as per the March 2022 shareholding pattern of the company available on the BSE.

Rekha Jhunjhunwala, the wife of billionaire investor Rakesh Jhunjhunwala, has increased her stake in NCC by 0.72 per cent to 13.6 per cent, which translates into about 82,733,266 equity shares in the construction company during the March quarter, the shareholding pattern showed.

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This is so far the first rejig in Rekha’s portfolio during the March quarter, besides being stayed put in Aptech Limited. She publicly holds 21 stocks with a net worth of over Rs 8,857.2 crore, as per the stock analysis website trendlyne.com.

The stock has been an underperformer for the last six and 12 months, down around 15 and 9 per cent, respectively. However, it has gained over 13 per cent in the last month on the BSE. The counter on Friday, April 15, 2022, closed marginally lower by 0.5 per cent to Rs 69.8 per share on the BSE.

A domestic brokerage firm Centrum Broking expects NCC Ltd to report revenue of Rs 123bn/Rs 143bn and estimate an EPS of Rs9.6/Rs11.6 in FY23/24, respectively, and expects ROE (Return on Equity) to climb back to 10%/10.9% in FY23/24 respectively from 5% in FY21.

The brokerage maintained a Buy rating with a target price of Rs 126 per share (12x average FY23-24E EPS). The target price implies around an 80 per cent upside from Friday’s closing levels.

ICICI Direct Research estimates a muted execution for construction companies in the March-end quarter of the financial year 2021-22 on a Year-on-Year (YoY) basis amid delays in receiving appointed dates coupled with mixed order inflow trends.

For real estate companies, the brokerage added that sales volume growth is likely to be a function of new launches (in some cases), similarly, Retail (malls) and hospitality are likely to continue to post stronger YoY numbers with limited Omicron impact.