Rakesh Jhunjhunwala, the Badshah of Dalal Street, has a few stocks that are his all-time favourites. These are stocks that are closest to his heart and will be held for a lifetime.
Karur Vysya Bank belongs to this exclusive and elite club. In all his interviews, the Badshah never tires of reminiscing about how he bought a truckload of the stock way back in 1993 for a paltry consideration of Rs. 50 lakhs and how it is worth a fortune of Rs. 200+ crore today.
Rakesh Jhunjhunwala, in an interview to ET in October 2012, explained why he was so fond of Karur Vysya Bank. He said:
“… in Karur Vysya Bank, maybe, I think, I had invested 50 lakh in 1993, now I think it is 200 crore. I see now it is growing at 18-20 per cent. It has a good management, is rewarding shareholders, has a good yield. I think 400 is the price and 16 is the dividend. So four rupees, a four percent yield…. Banking will be 7-8 per cent of my portfolio”.
Now, in a stroke of good luck, Karur Vysya Bank has come into the radar of ace stock picker Daljeet Kohli. After carefully studying the prospects and risk factors of Karur Vysya Bank, Daljeet has recommended a buy. He has given several reasons for his recommendation. He points out that KVB has delivered robust growth in loan book at 27% CAGR in FY09-14 and book has increased by 3.3x over the same period led by significant increase in branch network to 588 from 312 in FY09. The recovery in the economy and the recent branch expansion will yield results in the near future.
Daljeet also explains that Karur’s asset quality has stabilized in FY14 with Gross / Net NPA of 0.82% / 0.41% in FY14, down from 0.96% / 0.37% in FY13 with a healthy provision coverage ratio of 75%. He also exudes confidence that the ROEs will remain stable despite capital raised by the QIP.
As to the valuations, Daljeet foresees a target price of
Rs 620, which is about 1.7x FY16E ABV. However, knowing Daljeet’s penchant for laying down “conservative” price targets, we shouldn’t be surprised if this price target gets taken out in no time.
Purchase TaTa Coffee at 900 it will go to 2000 in Short Period
sagar what is basis for this tgt can we know
Rakesh Jhun has been saying so many stocks for quite a few years now.
Those stocks are underperformers till date.
To list a few : Spice Jet,A2Z,Radico Khaitan,Escorts, Aptech
I’d say this man gives recommendations to all his bad picks and try to use the Retail Investors blind following to make a clean exit.
I don’t think he is honest in his Interviews.
“Making it in dis-honest way does not matter”
i fully agree he had penchant for picking stocks of suspected wrong doing murky promoters like DB REALITY,SPICEJET,RADICO,PRAKASH IND AND THE WORLD follows him blindly and he will escape without any trace
I do not agree. What media is revealing is only a part of his entire portfolio. Say, about 20%. Even Dolly Khanna’s open portfolio is just around 20%. The rest of the eighty percent is always hidden. A secret is a secret. Why should they reveal everything in public?
I too noticed the ill liquid stocks of RJ, and ET gave a head line once that the Ace Investor gifted a lot of SpiceJet shares to his wife at a price of Rs.26 a piece. Now it is around 13. But interestingly, his net doubled in the last one year from 3000 odd crores to 6000 odd crores……
Hello Friend,
I think there is some wrong understanding.
1. Always Rakesh Jhun gives recommendations of stocks which has Promoters with Shady background. (Wrong Doers)
2. Lets take a moment & watch his Interview during the start of this year 2013 & 2014 to CNBC.
In all such recommendations, always there will be 4 – 5 such stocks.
He recommends few stocks it but in the background he will slowly offload and get rich making the Retail Investor Poor.
Perfect example for this/last year is “Radico Khaitan”.
Please check the holding information – RJ would not even list under the Major Stockholders(Individual) list.
“Last year end(2013), he was in the list.
This Start of the year (2014), he recommended it.
Mid-Year (2014) he is gone – sold his holdings Silently”
What a Strategy Sirji…! Idea Sirji !
If you analyse further, you can even see more such stocks he played the same way.
I don’t think any other major big investor profile guys go around such shadow stocks & give shadow recommendations for Retail Investors in Invterviews..!
Leaving the rest to your thought Guys..