Jhunjhunwala Loses Rs 1,600 Cr in Just Two Sessions as Stock Drops by 30%

Three discretionary trusts named after the children of the late legendary investor Rakesh Jhunjhunwala have been hit hard by the current market correction. Jhunjhunwala was known for selecting quality stocks in his portfolio during market downturns, but he lost nearly Rs 1,600 crore in just two sessions from a single stock that plummeted by up to 30% during this time. Interestingly, the three Jhunjhunwala trusts own nearly a quarter of the company.

We're talking about Concord Biotech, which fell to a low of Rs 1,482.15 on Monday, down another 12.46 percent for the day. The stock has dropped nearly 30% in the last two trading sessions and is down 45 percent from its 52-week high of Rs 2,658 set in September 2024.

According to the most recent shareholding pattern, Jhunjhunwala owned 2,51,99,240 equity shares, or a 24.09 percent stake in the company, as of December 31, 2024. This stake has not changed since it was listed in August 2023. However, the value of this stake fell by about Rs 1,590.42 crore to Rs 3,730.90 on Monday, from Rs 5,321.32 crore on Thursday.

However, this stake is individually owned by Nishtha Jhunjhunwala Discretionary Trust, Aryaman Jhunjhunwala Discretionary Trust, and Aryavir Jhunjhunwala Discretionary Trust. Its revenue for the quarter under review was 244.2 crore, a 1% increase over the previous year. Ebitda for the quarter fell 7.46% YoY to Rs 98 crore, while margins fell nearly 400 basis points to 40.1%.

Choice Broking reported that the API segment, which accounts for 72% of revenue, experienced a slowdown due to delayed customer orders as a result of stockpiling in the previous quarter. The formulations segment, which accounts for 28% of revenue, saw a decline due to calendar year-end closures for global clients and tender delays, resulting in a revenue shift, the company said.

"Management expects these orders to arrive in Q4. Customer transitions to the Limbasi facility were slower than anticipated. The expansion of injectable facilities is expected to be a key long-term driver, increasing both revenue and profitability. We expect Concord to benefit from the expansion of its Limbasi facility, which will drive growth in the API segment, as well as market expansion and product launches," Choice said.

Concord Biotech is rated 'buy' by Choice Broking, with a target price of Rs 2,207. Among other brokerage firms, Antique Stock Broking has a 'buy' rating on the stock with a target price of Rs 2,187, while Kotak Institutional Equities has maintained a 'add' rating with a target price of Rs 2,050.

Concord Biotech is well-known for its products, and it has a presence in over 70 countries worldwide, with efficient distribution infrastructure in markets such as the United States, Europe, Japan, Latin America, Africa, and Asia, as well as a significant presence in India. It operates two API manufacturing units and one finished formulation unit, all of which are located near Ahmedabad, Gujarat.