Novice investors like you and me have the bad habit of sitting on our haunches and waiting for stock tips to come our way. We are not inclined to roll up our sleeves and do hard, back-breaking research into stocks.
In this, we have to take a cue from Rakesh Jhunjhunwala, the Badshah of Dalal Street, on how there is no substitute for hard work.
We have seen several times in the past that though the Badshah is a 2x Billionaire (worth Rs. 13,000 crore) and has an army of razor-sharp analysts to rely upon (which includes whiz-kids like Utpal Sheth and Atul Suri), he likes to roll up his sleeves and do primary research himself.
The Badshah also has a penchant for landing up at investor conference calls and asking tough questions from the management.
Two of his favourite haunts are the investor conferences of Aurobindo Pharma and Tata Motors.
Today, nobody was surprised to see Rakesh Jhunjhunwala demand answers from Aurobindo’s management on various issues relating to their Q4FY16 results. The Badshah wanted details of the profitability of the European business of the Company. He raised a grievance that the Company provides overall margins and not the margins of separate segments. He also demanded information on the treatment of R&D expenditure and litigation expenditure. Fortunately, the management provided cogent answers to all questions and soothed the Badshah. At the end, the Badshah was satisfied. He congratulated Aurobindo Pharma for its excellent Q4FY16 results.
Incidentally, Rakesh Jhunjhunwala was among the first to spot Aurobindo Pharma’s potential as a powerhouse stock. He homed in on the stock in early 2013 and has held on to it tight. Today, the stock is a magnificent 8-Bagger. The Badshah’s holding is worth in excess of Rs. 500 crore.
(Aurobindo Pharma 5 Year Chart)
One little known fact is that Tata Motors is the crown jewel in Rakesh Jhunjhunwala’s portfolio. When he mentioned this in an interview, Nikung Dalmia said (@15.50) “My heart froze when you said that Tata Motors is your largest investment””. “It is” the Badshah replied and also provided a brief rationale on why he is so bullish about the stock.
(Tata Motors 3 Month chart)
Tata Motors is virtually flat on a YoY basis. Today, it surged 10% bringing great cheer to the Badshah and evoking hopes that FY17 will be the year when it will deliver bumper gains!