Rs 165,19,95,596 lost in just 1 month; Rekha Rakesh Jhunjhunwala's bet on this small-cap loss-making company goes wrong, do you own it?

Blindly mirroring the portfolio of an Ace investor can potentially destroy the wealth of a retail investor who has limited capital to invest.

Ace investors, with their vast experience and keen market insights, have a proven track record of making wise investment decisions. However, sometimes these investors have also faced significant downturns in their investments in companies with poor financials. Remaining invested in such companies instead of making the right decision can lead to further losses.

Similarly, Rekha Jhunjhunwala, the wife of the late Rakesh Jhunjhunwala, has seen her portfolio stock that is Sun Pharma Advanced Research Company Limited plummet by over 50 per cent from its all-time high levels in just one month. The investment value had dropped from Rs 297.66 crore when the price peaked at Rs 472.80 on April 9, 2024, to Rs 132.46 crore as per Tuesday’s closing price, marking a significant fall of around 55 per cent within a month.

Suppose an investor had purchased the same stock at its all-time high price, expecting multibagger returns in the future. In that case, the investor's capital would have decreased by over 50 per cent during the same period.

Sun Pharma Advanced Research Company is involved in the research and development (R&D) of pharmaceutical products.

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Share Performance:

On Tuesday the company’s stocks closed the day at Rs 210.40 per share representing a fall of 1.84 per cent. However, currently, it is trading at Rs 214.50 per share on the BSE. The current market capitalisation of this company stands at Rs 6,960.99 crore. Additionally shares of this Mid-Cap company have delivered a negative return of around 10 per cent in the past six months.

Financial Performance:

As per the Quarterly Results in Q3 FY24, SPARC reported revenues of Rs 14 crore, reflecting a de-growth of 89 per cent YoY compared to the same quarter in the previous year, when the revenue stood at Rs 131 crore. The company posted an operating loss of Rs 103 crore for the quarter, in contrast to an operating profit of Rs 16 crore in the corresponding quarter of the previous year. Furthermore, the company reported a net loss of Rs 100 crore, compared to a net profit of Rs 10 crore in the same period last year.

Investors should remain vigilant for stocks exhibiting financial red flags. Additionally, it's prudent to exercise caution when mirroring the portfolio of renowned investors.

Disclaimer: The article is for informational purposes only and not investment advice.