Hello friends,
Today we are going to talk about
Warren Buffet of India, Rakesh Jhunjhunwala's portfolio.
We will talk about those
companies in his portfolio, which he has major stakes in.
Friends, we always look up to Rakesh Jhunjhunwala
as an idol.
And always see where he invests.
And also why he chooses those companies.
At the end of this video
we will have discussions on the lessons
which will help us become a good investor.
I, Jagdeep Singh welcome you to Groww channel.
Let's discuss Rakesh Jhunjhunwala's portfolio.
Speaking of Rakesh Jhunjhunwala,
we should first of all talk about his favourite stocK
In Rakesh Jhunjhunwala's portfolio
his favourite stock is Titan
In which he has invested over 7500 crores.
This company is one of the five biggest
watchmaking companies in the world.
To talk about Titan's shareprice
in January 2005, its share price was
around 7 rupees.
To talk about its share price today
today it trades above 1200.
When we hear the name Titan,
we think about watches.
Which is true, but it has other businesses too
In jewellery,
you must have heard about Tanishq
Tanishq is a brand
that is owned by Titan.
To talk about Tanishq
until recently the jewellery market was unorganized
because of which people used to get fake gold
and there used to be trust issues.
By solving that, Tanishq built a brand
in which people could trust
in purity
Also, they came up with different designs,
and patented their designs.
Because of that, they could charge more marking charges
and their margins improved too.
As I told you, Titan's business is spread across different sectors.
As you can see on the screen,
Titan's journey started in 1984,
and spread through different sectors
It has different brands,
for example, Titan, Tanishq, Sonata
In 2007 they started Titan Eye Plus
which is in the business of making spectacles.
Other than this, they also started a perfume brand called Skinn
which targets the perfume sector.
Let's talk about Casinos now.
You must be wondering why I am talking about Casinos now.
That's because Rakesh Jhunjhunwala has
three hundred crores worth of investment in such a company
that runs casinos in Goa.
Apart from casinos, they also have hotels.
I am talking about Delta Corporations.
In this company, Rakesh Jhunjhunwala has total ownership of more than 7%.
The total invested value is
more than 300 crores.
You must be thinking what he saw in this business,
that he invested so much
Friends, whenever we go to a casino,
we mostly lose all our money
When we lose money,
casino earns money.
This gives good profit to the casino.
It has very little competition in Goa, too
To talk about financials of Delta Corp,
friends, this is a zero debt company
which means they do not have any debt to repay.
Apart from this, there is an interesting thing in this company,
which is their margins.
the margins of this company is almost 40%
To have 40% margins is
a big deal for a company.
Because in a casino business,
set up cost is too high
but it is less expensive to run.
due to which their margins are impressive.
The next company is SpiceJet,
in which Rakesh Jhunjhunwala has more than 100 crores of investment
But why SpiceJet?
In recent years, India's airlines industry has grown
Till now, it has more scope for growth in India.
There are possibilities for growth in this business,
and that's why he chose SpiceJet.
In addition to this,
SpiceJet beats its peers in many financial parameters
In market share,
SpiceJet's market share is more than 13%
Other than this, to talk about load factor,
SpiceJet's load factor is better than IndiGo
which is 92%
But a year ago, its load factor was 94%
Let me tell you an interesting fact about SpiceJet,
In 2014, SpiceJet was about to close down
but they turned things around
that today, it is one of the best companies in the airline sector.
After IndiGo, this is probably the most preferred airline
when it comes to investing.
As you can see on the screen,
these financial parameters
which helps us understand why Rakesh Jhunjhunwala chose this company.
To talk about growth in terms of income,
it has grown by 18% in 2018-19
as compared to 2017-18.
Apart from this, if we talk about growth
in passenger avenue,
this year it is 16% as compared to
2017-18
You may have heard of CRISIL
if you keep up with financial news.
Because Rakesh Jhunjhunwala has invested more than 500 crores in this company.
Out of total of this company's ownership,
Rakesh Jhunjhunwala has 5%
First of all, let me tell you what CRISIL does.
Friends, CRISIL is a rating agency
that rates different companies based on their credit
Imagine that I have a company
which borrowed money from a bank,
say, 100 rupees.
Now my company is performing well,
I can easily repay the money,
then the rating agency will give me an A rating.
If my company stops performing well,
if the revenue is not good,
due to which I will have problems in debt payment,
if this happens,
rating agencies will lower the rating of the company
so that banks will be able to recover their assets on time.
Friends, in any financial ecosystem,
companies with good ratings are essential.
Hence, CRISIL's importance shot up in India.
In addition to this, now financialization,
has not happened in India in full swing.
It will happen in the near future,
therefore CRISIL's demand might increase.
Friends, in recent days,
CRISIL and other credit rating agencies faced issues,
because the companies which they had given good ratings to
defaulted from paying loans.
So every business has pros and cons.
A good investor should learn how to invest in the right place at the right time.
Friends, if I talk about share price of CRISIL,
in 2005, its share price was
around 50.
At a time it used to trade above 2000 rupees.
But a few problems came up in recent days in the financial sector.
because of which it trades at 1300 rupees.
To tell you a little bit about financials,
CRISIL is a zero debt company
that has no debts at all.
To talk about its competitors,
its competitors are ICRA and CARE Ratings.
Let's talk about the last company.
Our last company is Ion Exchange.
Ion Exchange is a company that works in water treatment sector.
To explain water treatment,
before a company releases wastewater, it has to be treated.
In recent days, there is much talk about pollution
because of which government has set many restrictions on industries.
For example, treating toxic water before dumping it in the environment.
Because of these regulations, the demand for this company rose recently,
perhaps this is why Rakesh Jhunjhunwala invested in this company.
To talk about financial parameters of Ion Exchange,
It is almost a zero debt company
that has little debt.
An interesting fact about Ion Exchange is that,
it has given more than 100% returns to its investors in the last year.
A year ago,
its share price was above 350,
which has now increased to 700.
To talk about Ion Exchange's net profit,
in 2010, its net profit was almost 5 crores.
It has now increased to 45 crores.
In the last nine years,
has made its profit almost ten times.
There are many other companies in Rakesh Jhunjhunwala's portfolio.
If we discuss all of them, this will become a very lengthy video.
So I will tell you what we get to learn from this portfolio.
First, as I tell you in every video,
diversification is very important for an investor.
Be it a small investor or a big one like Rakesh Jhunjhunwala.
Even in his portfolio, there are so many companies that belong to different sectors
because he has diversified his portfolio very well.
The second lesson that we can learn
is barrier to entry.
You must be thinking about what it is.
In every industry, when a new player comes in, they have to face different barriers.
In an industry where there are more barriers,
it is difficult for competitors to enter and survive.
Rakesh Jhunjhunwala has invested in those companies from industries
where barriers to entry are more.
For example, CRISIL, which has only two competitors
Titan, because in jewellery business capital expenditure is more.
So it is difficult for a company to enter the business.
Similarly, Ion Exchange in the water treatment industry.
When you are trying to build a good portfolio,
try to choose those companies
which are difficult to be replaced
by new players.
Now you must be thinking why not buy the same companies
as Rakesh Jhunjhunwala.
I had told you in a previous video,
that it is risky to copy a portfolio.
Because we don't know at what price Rakesh Jhunjhunwala bought these particular shares.
If we go ahead and buy today,
maybe its price may have increased a lot,
if the price goes down, you will suffer losses.
The purpose behind this video is simple:
to tell you how important diversification is
for all types of investors.
Apart from this,
before we choose a company,
we need to research well.
We should choose a good company for a long time horizon.
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Friends, this video was for educational purposes.
We did not make any recommendations for buying or selling.
Happy Investing!