Rakesh Jhunjhunwala bets on Geometric ?

[rmani84]

Geometric, promoted by the Godrej Group is a decent bet in mid-cap space. Rakesh Jhunjhunwala probably considers it the dark horse among the IT midcaps. From September last year, he raised his stake in Geometric, which provides engineering services to clients such as ABB, DaimlerChrysler and Toshiba.

Jhunjhunwala's stake in Geometric was nearly 26 Crores in 2011. I think he added some more. Considering his portfolio size of over 4000 Crores, its only 0.65% allocation in Geometric. A lot of people get hysteric about stocks he holds. One needs to be realistic about them.

Lets take a realistic look at Geometric. Its not a bad bet. Zero debt with 34 Crores cash in hand makes it Safe. Profits Dipped from 43 Crores to 14 Crores in 2010. Profits have only doubled in the last 5 years. So, don't expect the stock to go up in a huge way just because Jhunjhunwala holds it. It will only go up as much as their profits rise. Its already trading at a P/E of 36, which is already expensive than most its peers in the IT Software industry.

Price when i wrote this: 106


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[pankajj]

Am not sure how many successful businesses has these so called famous investors have put their money into. I keep reading about their buys and exits and what I understand is their investments is more to do with stock market movements and not business growth.

Please correct me if I am wrong.

[rmani84]

Am not sure how many successful businesses has these so called famous investors have put their money into. I keep reading about their buys and exits and what I understand is their investments is more to do with stock market movements and not business growth.

Please correct me if I am wrong.

That is partly true ... Rakesh Jhunjhunwala holds equity portfolio is worth over 4000 Crores and he has almost 40 stocks in his portfolio ... But over 3000 Crores are exposed in only 3 stocks (Titan Industries, CRISIL, Lupin) ... All 3 are great bets even for a common man ...

But people cry over the other 37 stocks he holds which he does not seriously bet on ... They invest all their money on some of them which are not so good and lose money .... No-one is really interested in Titan or CRISIL or Lupin which they actually should be interested in ....

And some of these companies, such high net investors would have invested as Venture Capital, years before the companies issued IPO ... And they mostly cash out during IPO or post IPO in secondary markets ....

One such example is A2Z in which Jhunjhunwala diluted his shares during IPO ... Its not such a great bet now in secondary market. But jhunjhunwala would have made Venture Capital investment at damn cheaper rates years before IPO ....

[rmani84]

Rakesh Jhunjhunwala's - Equity Portfolio Analysis - Watch the below Video