How Rakesh Jhunjhunwala's favourite stock managed to earn a slot on Sensex

Titan Company, whose shares ace investor Rakesh Jhunjhunwala holds, will enter the benchmark Sensex on December 23.  Titan Company stock will be accompanied by Ultratech Cement and Nestle India to the benchmark index. Titan Company stock has been on Jhunjhunwala's radar since 2002.

Rakesh Jhunjhunwala first bought 6 crore shares of Titan Company in 2002-2003 at a price of Rs 3, according to media reports. The stock which currently trades around Rs 1,165 has risen nearly 38,733 percent till date. Jhunjhunwala along with his wife Rekha holds around 6.51% or 5.76 crore shares in the large cap stock which is the oldest constituent of the big bull's portfolio.

Also read: Why Rakesh Jhunjhunwala bought 1.3 crore shares of YES Bank

Of late, the stock has clocked strong performance on other fronts which makes it an eligible candidate to acquire a slot on Sensex.

Here's a look at five primary factors why Rakesh Jhunjhunwala's favourite stock will be included in the 30-stock index.

• Titan Company has featured among the top 100 companies listed by average of full market capitalisation in the last six months. The firm's current market cap stands at Rs 1,03,400.92 crore on BSE.
• Titan Company has been traded on each and every trading day on BSE for the last one year which makes it an eligible candidate for entry into Sensex.
• Titan Company features among the top 150 companies listed by average number of trades per day for the last one year.
• The firm is among the top 150 companies listed by average value of shares traded per day for the last one year.
• The large cap stock has been listed for last one year on BSE which fulfils the criteria for entry into Sensex. The stock has gained 27.13% during last one year and 25.24% since the beginning of this year.

Apart from fulfilling the eligibility criteria for entry into Sensex, the firm has been a consistent performer on the financial front too during the last one year. Profit after tax rose 1.8% to Rs 320.16 crore for the quarter ended September 2019 compared to Rs 314.38 crore in the corresponding period of last fiscal.

The firm witnessed subdued performance in jewellery business led by a demand slowdown due to gold prices hitting their all-time high in last quarter.

Also read: Rakesh Jhunjhunwala may have lost Rs 715 crore as Titan stock falls nearly 10% post Q2 results

Revenue of the luxury goods maker stood at Rs 4,435 crore in Q2 of the current fiscal compared with Rs 4,407 crore in second quarter of previous fiscal. Earnings before interest, tax, depreciation and amortisation climbed 9.9% to Rs 513.2 crore in Q2 of the current fiscal compared with Rs 467.1 crore in the corresponding period of previous fiscal.

The company managed to improve its cash flow position for fiscal ended March 2019 at Rs 102.39 crore (negative) from Rs 205.37 crore (negative) for fiscal ended March 2018.

By Aseem Thapliyal