Over 450% jump since March lows; Rakesh Jhunjhunwala just entered this Tata stock

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Ace stock picker Rakesh Jhunjhunwala picked more than 32 lakh shares of Tata Communications in the third quarter of 2020-21. Shares of the company have climbed 486% to Rs 1,168.80 on January 12 from its 52-week low of Rs 205.70, scaled in March 2020.

With a net worth of Rs 15,901 crore, Jhunjhunwala is the second-biggest individual investor in the country after Radhakishan Damani who has a net worth of over Rs 90,000 crore.

Latest shareholding data showed that Jhunjhunwala held 32,00,687 shares, or 1.12% stake in the company as of December 31. He was not among the key shareholders in the previous quarters. On the other hand, promoters kept their stake constant at 74.99%.

For the quarter ended September 30, Tata Communications posted seven-fold growth in consolidated net profit at Rs 384.81 crore. It had registered a profit of Rs 54.31 crore in the same quarter last year.

Consolidated revenue increased by 4.5% to Rs 4,477.18 crore during the said quarter from Rs 4,282.3 crore in the year-ago period. The company will announce its December quarter results on January 19, 2021.

Commenting on the price movement and Q2 results, ICICI Securities in an earlier report said, “The consistent performance of the data segment is impressive with step up in margins led by scale and cost initiatives. Notwithstanding, some benefits which may wane off, we expect revenue growth traction (likely to step up by FY21 end) to keep the margins trajectory firm.”

It further added that the company’s strategic growth plan, focused approach and consistent improvement in data segment continue to drive multiple re-rating, which is visible in the price run-up.

On the other hand, small investors seem booked some profit after the recent run-up as their holding in the company declined to 2.25% in December quarter from 2.32% in the preceding quarter ended September 30.