Stocks in “pole position” are usually safe
Common sense dictates that stocks which are said to be in “pole position” are usually safe and investment worthy. This is because these stocks have not participated in the Bull Run and have been laggards. Investors have few expectations from such stocks and the risk of a disappointment is low.
However, because these stocks enjoy powerhouse credentials, they are expected to take off like rockets as and when the trend changes. Their “pole position” status means that visionary investors who back them early are expected to pocket huge gains without any risk to their capital.
Siyaram Silk Mills is in the pole position
To our good fortune, two of the finest minds in the investing fraternity, Ramesh Damani and Manish Bhandari, have confidently declared that Siyaram Silk Mills is in a pole position at present and will surge as soon as the trend changes.
It requires to be noted that Manish Bhandari (of Vallum Capital) has a stellar record when it comes to picking multibagger stocks. One of his favourite stocks, Indo Count, has stunned with 10-bagger gains in less than 24 months. Another one of his favourites, Shilpa Medicare, is firing on all cylinders and notching up hefty gains.
Vote of confidence by Dolly Khanna & Sunil Singhania
In an earlier piece, I remarked that it is sheer buffoonery to ignore any stock where Dolly Khanna has given her precious vote of confidence.
The basis of my assertion is Dolly’s stellar track record. Her portfolio has more glittering multibaggers than what anyone else can boast of.
Sunil Singhania has similar credentials. In his capacity as fund manager of Reliance Mutual Fund (one of the Country’s largest mutual funds), he knows the ins and outs of how to find multibagger stocks.
While Dolly Khanna holds 51,270 shares of Siyaram Silk Mills, Kanchan Sunil Singhania holds 28,007 shares. This is as of 1st April 2016. The present holding is not known.
Vinit Sambre’s DSP Blackrock Micro Cap Fund hikes stake
Another indication that Siyaram Silk Mills is on the correct trajectory comes from the fact that DSP Blackrock Mutual Fund has increased its holding in the Company to 5.25%.
Vinit Sambre has been awarded the title of “Best Mutual Fund Manager” for having delivered an impressive CAGR of 25.5% over the past five years. He has beaten his peers by a wide margin and so his stock picks cannot be taken lightly.
Research report by Angel Broking
Amarjeet S Maurya of Angel Broking has conducted painstaking research into the affairs of Siyaram Silk Mills. He has recommended a buy in the following words:
“Outlook and Valuation: Going forward, we expect SSML to report net sales CAGR of ~10% to ~ Rs. 1,948cr and adj. net profit CAGR of ~11% to Rs. 107cr over FY2016-18E. The same would be on the back of market leadership in blended fabrics, strong branding, wide distribution channel, strong presence in tier II and tier III cities, and emphasis on latest designs at affordable pricing points. At the current market price, SSML trades at an inexpensive valuation (at a P/E of 10.4x its FY2018E earnings). We recommend a Buy rating on the stock with the target price of Rs. 1,605.”
The target price of Rs. 1,605 implies that more than 30% gains are in the offing.
Research report by Centrum
Mrinalini Chetty and Siddhartha Khemka of Centrum have echoed similar sentiments regarding Siyaram Silk Mills. The duo has recommended a buy in the following words:
“Siyaram Silk Mills Ltd (SSML), for Q2FY17 reported flat numbers in-line with our expectation. Owing to muted consumer demand, revenue and net profit grew by 7% YoY to Rs. 420 crore and 6% to Rs. 27 crore, respectively. EBITDA margin was flat at 12.7%. With an aim to cater to a broad spectrum of market from mass to premium, SSML has developed and acquired wide range of brands. The company has also engaged in continuous advertising and promotions which have helped in establishing a strong brand recall. The change in product mix with better focus on high margin readymade garment segment and pick-up in consumer demand are the key future growth triggers for the company.”
Research report by Edelweiss
Edelweiss are also strong supporters of Siyaram Silk Mills. They have given the stock pride of place in their famous “Midcap Marvels” portfolio.
In addition, Kshitij Kaji of Edelweiss has given convincing reasons on why the stock is worthy of a buy:
We have to compliment Ramesh Damani and Manish Bhandari for putting Siyaram Silk Mills in the spotlight. It does appear that the stock has the necessary wherewithal to sparkle and bring cheer to the portfolio of Dolly Khanna and other stalwarts who have invested in it!