Rakesh Jhunjhunwala Trims Stake In This Infra Stock in June Quarter of FY23. Do you Own?

Rakesh Jhunjhunwala Portfolio: Ace investor Rakesh Jhunjhunwala has trimmed his stake in the infrastructure development firm NCC Ltd in the first quarter of FY23. During this quarter, Jhunjhunwala faced a massive decline in the wealth of his portfolio due to market volatility amidst macroeconomic risks. Jhunjhunwala sold 0.38 per cent of his stake in NCC in the last quarter. His shareholding at the end of Q1 stood at 12.48 per cent. However, Rekha Jhunjhunwala, the better half of seasoned investor Rakesh Jhunjhunwala, kept her holding in the underperforming stock NCC unchanged, when compared with the March quarter holdings, data showed.

The scrip has fallen 19.3 per cent in 2022 so far. In the last year against an 8 per cent drop in the BSE Sensex during the same period. NCC has, in fact, lost 40 per cent of its value. Rakesh Jhunjhunwala has stayed invested in this stock at least since December 2015.

As per the latest shareholding pattern, in June 2022 quarter, Rakesh Jhunjhunwala holds 11,600,000 equity shares or 1.85 per cent in his wife’s name Rekha Jhunjhunwala. He also holds 66,733,266 equity shares or 10.63 per cent in the name of Jhunjhunwala Rekha Rakesh.

NCC trades on BSE under the ‘A’ group in S&P BSE 500 index. Shares of NCC hit a 52-week high of Rs 97.90 on July 13, 2021, and a 52-week low of Rs 51 on June 21, 2022.

For the full year FY22, NCC has achieved a total income of Rs 11,209 crore compared to Rs 8,065 crore in FY22. EBITDA climbed to Rs 1,023.80 crore in FY22 versus Rs 919.08 crore in the previous fiscal. Further, PAT jumped to Rs 482.41 crore against Rs 268.31 crore of FY21.

In May, after the fourth quarter and fiscal FY22 earnings, research analysts at ICICI Securities downgraded their rating to ‘Hold’ from ‘Buy’. The analysts said, “Sharp debt reduction has been key positive. However, margins may see volatility in FY23. We, thus, assign HOLD vs BUY rating, earlier,” adding, “we value NCC at Rs 70/share (at (9x FY24 P/E).”

Highlighting triggers for future performance, the analysts on NCC said, firmly placed to capitalise on huge infrastructure pipeline while continued momentum in awarding activities to translate into healthy order inflows for the company. Further, expect a 10.3 per cent revenue CAGR over FY22-24E with margins at 10 per cent. Also, the focus is on monetisation of non-core subsidiaries to bring-in cash flows. Meanwhile, unwinding of receivables to provide liquidity boost and strengthening of balance sheet likely with a gradual decline in debt can be expected.

During Q1FY23, as per the data, Jhujhunwala’s wealth declined 24.67 per cent to Rs 25,425.88 crore compared to a record net worth of Rs 33,753.92 crore in the March 2022 quarter. At present, Rakesh Jhunjhunwala holds 33 stocks on exchanges.

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