A few months back big bull Rakesh Jhunjhunwala has purchased 12.74% stake in The Mandhana Retail Ventures Ltd (TMRVL). You may also check the full holdings of RJ here. Rakesh Jhunjhunwala latest portfolio entrant the Mandhana retail ventures ltd jumped up after that and clocked a high of 246.30. But since then the stock has seen some correction and on 28th of March, it has made a low of 201.30. After the correction, the script seems to be back in track and we find some trading opportunity in the script now.
About the company The Mandhana Retail Ventures Ltd
TMRVL was actually demerged from Mandhana Industries and when the demerger took place the companies debt stood nearly at 17.5 crores. But as Mr. Manish Mandhana the MD told in an interview that they have managed to reduce the debt to just over 7 crores in due course.
The company sells apparel under the brand name Being Human. The domestic business contributes to 91% of the revenue. They have 60 odd brand outlets out of which few are in international locations like France, Mauritius, and Nepal. Apart from own outlets, their brand is present in large retail stores like Shopper’s Stop, Lifestyle, etc. The company also has a large distribution network.
The YOY revenue of the company has grown from 54.76 crores to 63.25 crores in Q2 FY17 and its a 15.5% growth. The YOY EBITDA of the company has grown from 8.91 crores to 14.15 crores in Q2 FY17 and its a 58.8% growth. Mr. Manish is hopeful to maintain an EBITDA margin of 24%-25% in the future. He is also expecting growth in revenue by 20%-25%.
Technical aspect of the company
As per the Zerodha Kite daily chart, we can see the correction is over in this Rakesh Jhunjhunwala latest pick and the daily SuperTrend indicator is trying to come back to buy more. As both the fundamental and technical scenario is favoring bulls I suggest to add a small quantity of this stock to your portfolio (CMP 229.65) and add more when SuperTrend buy is confirmed in the daily chart. We can safely expect 260-270 in the short term. Medium-term the stock also has the potential to become a multibagger.
2019 update of the stock in Rakesh Jhunjhunwala latest portfolio
When we have first written this post the price of the stock was quoting at 229.65 on April 2017. Our expectation went wrong and in the last two and half years the stock has dropped a lot. It has eroded a lot of the investors money and presently quoting between Rs. 19 and Rs. 20. So it is a loss of 91.59 percent from the update we posted on April 2017. Check the current end of day price chart of the stock.
From the current technical analysis of the stock we can see that the stock is trying to recover.The Relative Strength Index is showing momentum. The Moving Average Convergence Divergence is still on the negative territory but it is trying to enter the positive zone. So the stock is trying to be back with a renewed buying interest.
Actually the main reason for the pain of this company was due to the cancellation of contract between the company and Salman Khan Foundation. The contract was regarding the brand Being Human.
Fundamentals of the company Mandhana Retail
We have checked the company’s fundamentals. We noticed the company has poor earnings per share strength. It also does not belong to a top rated industry group. But this stock has good price strength and good buyer demand. Check the chart from Market Smith.
So this stock has a below average fundamentals and still now it is maintaining a good buyer demand. Rumours are spreading that there can be the news of contract renewal very soon. When I am updating this old post the stock is quoting at 19.10 hitting the upper circuit.
How much is the loss due to this stock in Rakesh Jhunjhunwala latest portfolio?
We have checked the latest holding of RJ in our site and we found that TMRVL is giving a loss of 35.08% to the big bull. Check the image below.
Can anyone enter fresh in The Mandhana Retail Ventures Limited?
We have already checked that the stock is having a below average fundamentals. Though on May 2019, the CFO of the company Mr. Hemant Gupta said that he is expecting 15%-20% growth in the revenue on the financial year 2019-2020. Still just due to rumour it will not be prudent to enter the stock freshly. The big bull may still hold this stock in his portfolio but retail traders must not enter this stock just because the big bull is holding this stock with a loss.
What about those who are still holding the stock just like Rakesh Jhunjhunwala latest portfolio?
Investors who are still holding this stock has shown a big negative in their portfolio. What should they do now? The sad reality is that they have not used any stop loss. Their valuation is down more than 90%. So there is no point in exiting the stock now. Rather if the stock can at least make some bounce they can get a better exit.
The last recognized peak of the stock was at 188.30. See the weekly chart above. If the stock has already made a bottom and can bounce at least upto 23.6% fibonacci retracement levels of the fall from the last recognized peak it can bounce till Rs. 51 level. That can be a better place to exit. Retail traders and investors should remember this stock as a lesson. Next time need to trade or invest with some defined stop loss to be safe.