Rakesh Jhunjhunwala’s holdings as on 30th June’09

This is just a small brief on the shares Ace Investor Rakesh Jhunjhunwala bought/sold in the June quarter. I may request readers to do their own homework before blindly copying his portfolio.

He bought 1,07,200 shares of Lupin, 7,00,000 shares of Nagarjuna Construction, 2,44,838 shares of Rallis India, 2,00,000 shares of Praj Industries and 2,85,000 shares of Hindustan Oil Exploration.

He sold 50,000 shares of Karur Vysya Bank, 27,000 shares of Titan Industries and 2500 shares of Bilcare.

No change in holdings in Crisil, Punj Lloyd, Pantaloon -DVR, Geojit BNP Paribas, Geometric,  Prime Focus, Zen Technologies and Mid-day Multimedia. Due to equity dilution in Pantaloon Retail, RJ’s holdings in Non-DVR Pantaloon might have come down to below 1% and hence it is not disclosed in the Shareholding pattern.

My observations: He increased his holdings in Lupin for the second consecutive quarter while he sold some Titan Industries in the last two quarters. My estimate is that he bought stocks worth Rs 35crs during the June quarter.

Disclosure: I hold Lupin and Punj Lloyd.

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21 responses to “Rakesh Jhunjhunwala’s holdings as on 30th June’09

  1. Hi Devesh: He has added almost 2.5 lakh shares to Rallis india. March holding stands at 255,250 and June holding which got updated yesterday stands at 500,088.

    PS: Love your posts on TED 🙂

  2. deveshkayal

    Thanks for the update! Hope you like my blog too!

  3. Oh I really love your blog…and you have a great deal of independent thinking too which is what makes it so interesting. I actually stumbled upon your blog by accident when I was googling RJ’s name and his recent portfolio additions/deletions/augmentations. 🙂

  4. Rare, Rakesh and Rekha owns 6.31% stake in Rallis according to the BSE disclosure.

  5. Hi Devesh, thanks for the info but I could not find the names of Rekha and Rare anywhere in disclosures. Could you please provide me the link for the above. Many thanks in advance.

    P.S. Lupin is inhabiting my portfolio too and is one of my favorite long term bets.

  6. sorry Devesh, forgot to paste the link in the earlier post. http://www.bseindia.com/Insidetrade_ScripWise.asp?scripcd=500355

    According to this link, Jhunjhunwala’s holding after buying 203000 shares stands at 457838 or 3.82% of Rallis. The June quarter shareholding pattern filing however mentions over 5 lakh shares. Has he sold some or has he transferred to PACs is what I am not able to confirm. Could you please help me in this regard with any additional info?

  7. Click on the link below
    http://www.bseindia.com/qresann/news.asp?newsid={7020B2F1-DC1B-4DCC-B0CA-6F74363BB4EE}&param1=2

    I bought Lupin as a defensive cum growth stock with cheap valuations given its high return ratios. I was very impressed with the promoter at the AGM. The trigger for this stock will be expansion in margins from back-ending of production of their Japanese subsidiary and other acquisitions.

  8. Thanks a lot Devesh, you really amaze me with your depth of research and the agility with which you keep yourself updated. My interest in Lupin started when I came across an article about it in Forbes. It was written by the well-known journalist Robyn Meredith. Later even Rakesh Jhunjhunwala mentioned that he had a large investement in Lupin when Udayan questioned. After researching the subject of generics, it slowly made sense to me that a generic company should go after difficult-to-make products and/or brands to preserve margins in the wake of competition. Lupin was doing exactly that and I was impressed with DBG just like you. I immediately backed my truck to this and bought a lot of shares when it was languishing at 400 odd and an unbelievable 8 PE.

    I have never regretted it since 🙂

  9. Great! I just read that Forbes article. DBG is a very passionate person. He won’t sell out like Malvindar Singh.

    Lupin should grow its revenues by 25% for the next 3 years. Management said they intend to launch one branded generics which is a high margin business every year. This FY, Lupin’s ROCE will improve to 30% from 26% in FY09 while ROE should remain above 30%. I believe Lupin is still cheap @ FY11 PE of 11x.

  10. An oft-overlooked angle of pharma companies is their contract manufacturing. Lupin makes some difficult to make products like injectables. It has one of the very few injectable-making plants outside USA. This could prove very lucrative.

    When it comes to contract manufacturing, Rallis is not bad either. In fact, some claim that the whole new facility in Dahej that will be commissioned in June 2010, will be devoted to that. 🙂

  11. CRAMS is used for captive consumption unlike Divi’s and Dishman. ROCE of Lupin’s contract manufacturing is the 2nd best in the industry which is amazing from generics point of view.

    What I find interesting is the Lupin’s acquisition strategy. They acquire companies which have lower margins then theirs and increase the same through manufacturing the drugs in India over 2-3 years.

    Rallis CRAMS business also seems attractive. Management is targetting 1000crs from CRAMS business alone over the next 5 years. CRAMS contributed just 13% to the overall revenues in FY09. So almost 10x growth in CRAMS is mindboggling. If they indeed achieve this, then the stock could be a multibagger.

  12. Thanks for the info Devesh :-), something tells me that Rallis could well achieve its CRAMS, exports, and domestic targets too. There is a recent report on the company by Angel Broking which details very clearly all the vital ingredients in Rallis’ business model which could prove to be quite a heady cocktail. Also, the very fact that Tatas almost have a 45% odd stake in the company which is the highest among all their group companies, makes me feel that even TATA too thinks highly of Rallis.

    Good management, focus on adopting new technologies, courage to explore new markets, hidden assets like real estate and Advinus, and strong balance sheet – all the ingredients are there, guess we just have to wait for the cauldron to start bubbling.

  13. Hi,

    Researching on Rallis India and found something very interesting. On 4th August & 11th August on moneycontrol chats Ramesh D. has asked one of the chatters to find the potential uses of Lithium and top 2 co’s that benefot globally from Lithiuma and their Indian connection.

    I did a little research on google and stumbled upon the fact that FMC Lithium is one of top global players in this field. Now the catch was that FMC has a connection with an Indian co. That co. is Rallis (FMC Rallis India) which now sells FMC products under Rallis brand itself;

    FMC has recently commissioned Butyllithium plant near Hyderabad (2007) and this facility. On July 16th there is a press release with respect to FMC US eanting to increase reach and profitability of all its palnts across the world which mentions this. Now rallis india has a first say on the FMC operations here in India. In fact this venture is controlled through FMC Rallis India.

    This news followed by Tata Chem annoucing stake increase and then RJ increasing stake through open market purchase seems to suggest that there is something really big coming here which market does not know about yet. In case you need links for the above info please let me know and add me on your blogs in future.

  14. Rallis have alliance with many international players. One Indian alliance is with Gharda Chemicals. Now since United Phosphorus is most probably going to acquire Gharda Chemicals, wouldn’t the alliance come to an end since United Phosphorus would market the GC products themselves ??

    Overall Rallis merits investment.

  15. What your take on its valuation currently.

  16. At 8xFY11 earnings, Rallis is cheap given its high return ratios and good dividend yield. Agri-chem stocks generally trade at lower PE so here earnings growth will drive stock price.

    I am not sure how Rallis will benefit from Tata Chem raising their stake.

  17. Hi Devesh

    Can u clarify RJs position in Bilcare ? He resigned from the post of Director but has he sold of his investments in Bilcare / does he continue to hold on it or planning to exit ?

  18. He has not completely exited Bilcare. But Mutual Funds have exited completely. I dont track this company but somehow packaging business does not look attractive to me.

  19. Tata Chem and hiking stake in Rallis has led to speculation, especially on TV 18 , that Rallis will eventually be taken over by Tata Chem. I think Rakesh Jhunjhunwala has smelled this opportunity and will hold out for a higher price if and when the total takeover materializes.

    This is very similar to what he did in Crisil. He picked up the company for its fundamental values and then Standard and Poor offered to buy it. He refused to sell and drove Standard and Poor to increase the price of their open offer twice. In short, he “brought them down to their knees” as one fund manager put it.

    Maybe Rakesh Jhunjhunwala has the same plan for Rallis too as he has been accumulating shares like there is no tomorrow starting from a very small holding of just 1.61% or 193,306 shares last year September to 6.3% or 756,588 shares as per latest info.

    Only time will tell whether a takeover materializes, but I would be glad of Rallis remained independant and continued to raise its margins and profitability the way it has done over the past few years.

  20. at what rate did RJ buy rallis, during the quarter mar-jun?

  21. Hello, are u get rakesh jhunjhunwala set 09 holdings. please send me……..

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