Auto stocks in Rakesh Jhunjhunwala’s portfolio were downgraded; Reduced Target Price—Here’s Why!

Shares of this Rakesh Jhunjhunwala stock were downgraded from long to short due to weak first-quarter earnings in the April-June quarter. Rakesh Jhunjhunwala made a new entry into auto stock in the recently concluded quarter. The billionaire investor had purchased more than 18 lakh shares of the tractor maker during the quarter ended June 30, 2022.

According to the latest company filings, India’s Big Bull, Jhunjhunwala 18,30,388 shares or 1.39% stake in Escorts Kubota, which saw a 20.35% drop in net profit to Rs 147.5 crore in Q1FY23. The tractor maker had recorded a standalone net profit of Rs 185.2 crore in the corresponding quarter of the previous year.

Affectionately known as Warren Buffet of the Indian Stock Exchange, the famed investor held a 5.2% stake in leading tractor and agricultural machinery maker Escorts, which is rebranding itself as “Escorts Kubota Limited”, during the quarter ended December 31, 2021 .

Downgraded Kubota Escorts

Meanwhile, global brokerages have downgraded and reduced the target price of Escorts Kubota stock after the tractor and farm machinery maker saw a massive drop in net profit in the April-June quarter. .

CLSA, which downgraded the action from buy to sell, also slashed Escorts Kubota’s target price from Rs 2,069 to Rs 1,612. fell 18% YoY (YoY) in July.

Saying the Kubota-Escorts synergies have yet to materialize, he cut the company’s earnings estimates by 24% to 26% in FY23-24 on 7% lower volume forecasts and large margin losses in the June quarter.

JP Morgan downgraded Escorts Kubota from overweight to neutral after the company missed its estimates. The brokerage reduced the target price from Rs 1800 to Rs 1565.

Rakesh Jhunjhunwala Wallet 2022

According to the latest company filings, Rakesh Jhunjhunwala holds up to 32 shares in the June quarter. The net worth of Rakesh Jhunjhunwala’s portfolio was pegged at over Rs 31,304.8 crore as of August 2, according to stock market analyst portal trendlyne.com.

Kubota Escorts Q1FY23 Results

Earlier, the company on Monday reported a net profit of Rs 147.5 crore in the quarter ended June 30, 2022, compared to a profit of Rs 185.2 crore in the corresponding quarter of the previous fiscal year, Escorts Kubota said in an exchange file.

Operating revenue stood at Rs 2,014.9 crores in the quarter ended June 2022, compared to Rs 1,677.0 crores in the same quarter of the previous fiscal year. EBIDTA for the quarter ended June 30, 2022 amounted to Rs 201.6 crore compared to Rs 238.8 crore in the corresponding quarter of the previous financial year.

“We are delighted to be Escorts Kubota Limited (EKL) now. During the first quarter of the current tax industry in the agricultural sector has seen a positive trend, after 3 quarter of decline. With the onset of monsoon and probably record production of kharif crops, rural liquidity and farmers’ sentiments are expected to gradually improve,” Nikhil Nanda, Chairman and CEO, said of the company’s first quarter results.

He further said that in the construction sector, the company has outperformed the industry in the markets served and expects the growth momentum to continue with the government’s push on infrastructure development.

“We are seeing good order intake in our rail business and expect a strong fiscal year. With recent government measures, inflation may stabilize in the near term and operating leverage may further contribute to partially dilute the impact on margins over the next few quarters,” Nanda said. added.

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