2 days Ago
Ashish Kacholia, ace investor and director of Lucky Investment Managers Pvt Ltd, recently walked away from five stocks. If you are an investor in the Indian stock markets, chances are you've heard of him. Kacholia is one of India’s most-followed stock pickers thanks to his outstanding track record.
He was the one who identified the potential in India’s rapidly evolving digital landscape way back in 1999 when he co-founded Hungama Digital with Rakesh Jhunjhunwala and others. There was no turning back from there. According to Screener.
com, which has information on stakes above 1% in companies, his portfolio currently comprises about 20 stocks. Kacholia turned heads when he exited five stocks between December 2023 and June 2024. Here’s everything you need to know about these stocks and the companies behind them.
HLE Glascoat Ltd HLE Glascoat is a leading manufacturer of specialised industrial equipment, focusing on glass-lined machinery, filters and dryers for a variety of sectors in India. With a network of seven production sites worldwide, it can produce more than 600 filters and more than 2,000 glass-lined units each year. The company recently expanded its footprint, launching a new Greenfield facility in Silvassa and securing a large plot near Anand, Gujarat, to build a dedicated glass-lined equipment factory.
Also read: Its clients include pharmaceutical giants and chemical heavyweights such as Bayer, UPL, Sun Pharma, Atul, Gsk, BASF, Pi Industries, SRF, Zydus, Dr. Reddys and Sanofi. It has a healthy order book of 550 crore, which will provide steady work for the coming months.
Its strategy is clear – to capture a larger slice of the market in its core product lines, both at home and abroad. HLE Glascoat has recorded compound sales growth of 26% in the past three years and 22% in the past five. Earnings before interest, taxes, depreciation, and amortization (Ebitda) increased from 47 crore in March 2019 to 114 crore in March 2024 at a compound annual growth rate (CAGR) of 19%.
Profit after tax was 41 crore in FY24, marking a CAGR of 12% over the past five years. HLE Glascoat’s stock is currently trading at 403, up 960% in the past five years. The stock is currently trading at a price to earnings (PE) multiple of 97x, which seems high.
The median PE multiple for the past 10 years is 67x. The promoter holding has decreased by a little over 4% in the past three years. Kacholia exited the stock as per his June 2024 filing, but DSP Small Cap Fund still holds a 3.
52% stake in the company. Vanaja Iyer, another prominent investor, also exited the stock around the same quarter in 2023. Barbeque Nation Hospitality Ltd Barbeque Nation Hospitality Limited (BNHL), founded in 2006, is a leading casual dining chain in India.
It is known for pioneering "over the table barbeque" or live grills. The company operates 212 restaurants across 77 Indian cities and eight international locations in the Middle East and Malaysia, with plans for 220 restaurants in total by the end of FY24. Its portfolio includes its own brands (Barbeque Nation, UBQ, Dum Safar) and acquired premium casual dining brands (Toscano and SALT).
Also read: The company has expanded strategically through acquisitions, including a 61.35% stake in Red Apple Kitchen (Toscano) and a joint 53.3% stake in Blue Planet Foods (SALT).
It is also focussed on increasing its digital presence, with these assets contributing 29.6% of Q2FY24 revenue. Barbeque Nation has grown sales at a CAGR of 35% over the past three years and 11% over the past five.
Ebitda grew from 129 crore in FY19 to 212 crore in FY24, at a CAGR of 10.4%. Despite this the company reported a loss of 11 crore for the June quarter, meaning profits increased at a CAGR of 11% over the past five years.
The stock is currently trading at 615, or 16% below its launch price of around 720. Barbeque Nation’s median PE multiple since listing is 119x. Kacholia may have sold his stake, but UTI Children's Hybrid Fund, Kotak Multicap Fund, Tata Elss Tax Saver Fund, and ICICI Prudential Regular Savings Fund still hold shares in the company.
Vaibhav Global Ltd Vaibhav Global Limited (VGL) is a well-known name in the global retail space, particularly in jewellery, accessories, and lifestyle products. It has a strong focus on the US and UK markets. VGL has diversified its product range, with non-jewellery items now accounting for 27% of revenue, up from just 11% in FY17.
The company has seven facilities, including a flagship at Jaipur that produces about 70% of its fashion jewellery. This 169,000 sq ft. facility produces three to four million pieces a year.
Also read | VGL's brand strategy is equally strong, with 31 in-house brands contributing nearly 29% of its global B2C revenue. These range from curated collections such as Sukriti and Bali Legacy to homegrown brands such as Tamsy and Iliana, and even exclusive designer labels. Vaibhav Global’s sales have grown at a compound annual rate of 6% over the past three years and negative 11% over the past five.
Ebitda increased from 203 crore in FY19 to 269 crore in FY24, at a CAGR of about 6%. Profit after tax was 127 crore in FY24. The stock currently trades at 315, up 85% over the past five years.
The current PE of Vaibhav Global Ltd is 40x and the median PE over the past 10 years is 25x. Vijay Kedia still holds 2.02% of the company’s shares and Motilal Oswal Flexi Cap Fund holds 1.
15% as of June 2024. La Opala RG Ltd La Opala RG is a tableware maker that specialises in opal and glassware. With four brands covering the economy and premium segments, the company’s product range includes everyday items and luxury crystalware.
La Opala leads the domestic market with a presence in more than 600 towns, and also exports to more than 40 countries. India's largest opalware producer, it operates three manufacturing units with a total capacity of 36,000 million tonnes per annum (MTPA), it recently expanded with a 12,000 MTPA greenfield project in Uttarakhand. Also read: The company maintains its edge with continuous R&D and annual design innovations, balancing its 90% domestic sales with strategic exports, primarily to West Asia, Brazil and the UK.
La Opala has delivered a compound annual sales growth of 20% in the past three years and 6% in the past five. Ebitda grew from 113 crore in FY19 to 136 crore in FY24 at a CAGR of 3.7%.
Profit after tax was 128 crore in FY24, marking compound annual growth of 12% over the past five years. The stock currently trades at 376, up 116% from 174 five years ago. Its current PE multiple is 34x, and the median over the past decade is 42x.
HDFC S&P BSE 500 ETF, DSP Dynamic Asset Allocation Fund, UTI Small Cap Fund, ICICI Prudential Bharat Consumption Fund held shares in the company as of the June quarter, according to data from Screener.com. Best Agrolife Ltd Best Agrolife, formerly Sahyog Multibase Limited, is a leading Indian agrochemicals manufacturer, ranking among the top 15 in the country.
It offers a portfolio of more than 70 formulations, including insecticides, herbicides, fungicides and plant growth regulators, developed from active ingredients manufactured in-house. With an export portfolio comprising 67 registered formulations and 130 registered technicals, Best Agrolife has long-standing relationships with major agrochemical corporations. Also read: The company operates three manufacturing facilities in Gajraula, Greater Noida, and Jammu & Kashmir, with a total capacity of 30,000 MTPA for formulations and 7,000 MTPA for technicals.
It has a distribution network of more than 6,000 dealers across 18 states. The company plans to launch six new products (three herbicides and three fungicides) in FY24. Best Agrolife’s sales have increased at a CAGR of 27% over the past three years.
Ebita rose from 51 crore in FY21 to 226 crore in FY24, at a CAGR of almost 64%. Profit after tax was 106 crore in FY24, for a CAGR of 42% over the past three years. The current stock price of 646 is more than 275% above what it was five years ago.
Best Agrolife stock currently trades at PE multiple of 41x. The median PE over the past 10 years is 14.6x.
Quant Small Cap Fund held a 2.11% stake in the company as of the June quarter. Big mistake or timely exit? Only time will tell whether Kacholia’s decision to exit these stocks was timely or a big mistake, but it’s always a good idea to keep tabs on what India’s Warren Buffets are up to.
It could give you the next big idea for your own portfolio. But whatever you do, talk to your financial advisor first..
