Fundamental Call: 2 Rekha Jhunjhunwala Stocks To Buy Next Week For A TP of Up To Rs. 4,112

As the wife of well-known investor Rakesh Jhunjhunwala, Rekha Jhunjhunwala, holds stakes in two firms, Metro Brands Ltd. and Titan Company, these are Rekha Jhunjhunwala's portfolio stocks. Motilal Oswal, a brokerage firm, has issued a buy call on Metro Brands shares, with a target price of Rs. 1,530. Sharekhan, a brokerage firm, has initiated a buy call on Titan Company shares, with a target price of Rs. 4,112.

Metro Brands Share Price Target

"METRO trades at rich valuations, at P/E of 55x on FY26 estimates, backed by: 1) a strong runway for growth, largely funded through internal sources, given its strong OCF-to-EBITDA ratio of over 50%; and b) superior store economics reflected in the balance sheet and a healthy RoIC of +50%. We believe the incremental opportunity in Fila and Foot Locker can further accelerate growth for METRO, which is not captured in the valuation," said the brokerage firm Motilal Oswal in a note.

"We factor in 21%/26% growth in revenue/EBITDA for FY24-26E and assign, PE of 60x on FY26E PAT of METRO's existing portfolio. We have not factored Fila and Foot Locker earnings, but we believe they have revenue potential of INR15-20b over the next 3-5 years (i.e. 30-40% share of Metro). Since both the brands are at initial stage of investing, we value Fila/Foot Locker at a ~75% discount to the potential value which creates an option value of INR160 (Exhibit 2), thus arriving at a valuation of INR1,530 per share," the brokerage added.

Rekha Jhunjhunwala's Shareholding In Metro Brands

During Q2FY24, Rekha Jhunjhunwala held a 4.60% stake in Metro Brands or 26,102,394 shares of Metro Brands in her portfolio.

Titan Company Share Price Target

"Titan's Q3FY2024 pre-quarter update provides a glimpse of the company's strong performance with revenues expected to grow by over 20% driven by yet another strong quarter by the jewellery business. Q3FY2024 is fourth consecutive quarter of ~20% y-o-y growth in revenue led by strong growth in the footfalls, while realisation growth was marginal during the quarter. Demand for plain gold and coins was high despite significant increase in the gold prices. Watches business has also clocked strong numbers, registering a 21% y-o-y growth with analog segment growing by 18% y-o-y. Emerging business registered 24% y-o-y growth with Taneira's revenues rising 61% y-o-y. Overall, standalone revenues are expected to grow by 22% y-o-y during the quarter. Store expansion continued across businesses and geographies with the company adding 90 stores in Q3FY2024, taking the group's retail presence to 2,949 stores," said the brokerage firm Sharekhan in a note.

Commenting on the share price target of Titan Company, Sharekhan added in a report that "Titan is eyeing a revenue CAGR of over 20% during FY2022-FY2027 led by an ambitious growth plan in the medium term. Though this will have some hit on margins initially, it expects consistent growth and improved mix to drive margins in the long run. Strong growth outlook, focus on sustained market share gains, and strong balance sheet makes it the best play in the discretionary space. The stock is currently trading at 46x and 40x its FY2025E and FY2026E EV/EBIDTA, respectively. We maintain our Buy recommendation on the stock with a revised price target (PT) of Rs. 4,112 (rolling it over FY26E earnings)."

Rekha Jhunjhunwala's Shareholding In Titan Company

During Q2FY24, Rekha Jhunjhunwala held a 5.37% stake in Titan Company or 4,76,95,970 shares of Titan Company in her portfolio.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.