Big Bull grills Titan bosses on future
Big Bull Rakesh Jhunjhunwala grilled the top bosses of Titan Company Ltd at an earnings conference call to find out what its expansion plans were and whether they were prepared to consider an inorganic route to beef up revenues.
Jhunjhunwala holds around 5.9 per cent of the watches-to-eyewear and jewellery maker that is currently valued at Rs 13,019 crore — and has always had a bullish outlook on the company.
Given his stake in the company and the fact that he is such a big influence on the stock markets, he could have gleaned this information privately from the company officials. The fact that he chose to do so at a conference call meant that the future insights of the company became publicly available.
This is not the first time that the Big Bull has posed hard questions to the management. In the past, he has lobbed hard-nosed questions at officials from InterGlobe Aviation, Federal Bank, Tata Motors and Aurobindo Pharmaceuticals.
Last week, Titan had reported robust growth in the third quarter with revenues surging over 30 per cent to Rs 9,570 crore while net profits leapt to Rs 987 crore from
Rs 419 crore in the year-ago period.
At the concall, Jhunjhunwala wanted to know if the company would take the inorganic route to acquire better technology and even whether it had been “late in (entering) the wearables business”.
Ajoy Chawla, the CEO of Titan’s wearable division, said the company had opened 27 stores this year and would open another 10-12 stores before the end of the financial year.
“Next year, we have in mind… a pipeline of 50, but we may land up opening 35 to 40. That depends on local conditions,’’ he added.
Saumen Bhawmick, CEO of the eyewear division, said that in the nine month period, Titan had added 125 stores and this was one of the biggest expansions by the division. By 2022-23, the network count should rise to 1,000 from the 707 at present.
Jhunjhunwala wanted to know whether the firm planned to plug into the Indian diaspora by venturing out to countries such as Singapore, Australia, West Asia and England.
Titan managing director C. Venkatraman said the company had opened its first international store in Dubai a little more than a year back and it had done fairly good business. It has opened two more stores in the region and will expand operations in the next two to three months.
Titan also plans to open its first North America store in May or June.
The company also said that the ticket size of transactions at the overseas stores was higher than in India because of the higher per capita income in those countries.
Realty rescue Jhunjhunwala has also decided to pick up a stake in DB Realty — the Mumbai-based real estate developer which was left in the lurch recently when the Godrej group walked away from a deal.
DB Realty has decided to allot 5 crore warrants to investors, including Rakesh Jhunjhunwala and his wife.
The decision was taken by the board of the real estate company after Godrej Properties cancelled plans to invest Rs 700 crore in the company for a 10 per cent stake, and set up a joint platform.
D B Realty said that it will raise Rs 1,575 crore through issue of warrants in multiple tranches to the promoter group and other investors as part of its plan to become debt free. The company disclosed that its board has approved the allotment of further five crore warrants convertible into equivalent numbers of equity shares to six non-promoter investors.
The company proposes to allot one crore warrants each to Rekha Jhunjhunwala, Rakesh Jhunjhunwala's RARE Investments, Abhay Chandak and Aditya Chandak. It will also allot 50 lakh warrants each to Lotus Family Trust and KIFS Dealers.
Post-conversion of warrants into equity shares, the company said the promoters will hold 54.08 per cent stake in the company, Pinnacle Investments 17.97 per cent and these six new investors together 9.98 per cent.