Ashish Kacholia is a strong believer in prospects for “ready to eat foods” stocks
Ashish Kacholia was one of the earliest investors to foresee the explosive growth prospects for companies that make ‘ready to eat’ food products.
In September 2018, he bought a big chunk of stock in a small-cap (Rs. 1800 crore market cap) named ‘DFM Foods’.
DFM Foods makes packaged snack foods which are sold under the brand names ‘CRAX’, NATKHAT etc.
DFM Foods presently occupies seventh place in Ashish Kacholia’s portfolio of glittering multibagger stocks.
It is notable that Ashish Kacholia is also a staunch believer in the prospects for technology stocks.
He has invested large sums in technology stocks such as BirlaSoft, Vaibhav Global, Majesco, NIIT, KPIT etc.
In fact, the flagship of the portfolio is a small-cap tech stock named ‘Birla Soft’.
It appears that Ashish Kacholia and Vijay Kedia share the same investing philosophy.
Vijay Kedia has also stuffed his portfolio with high-technology stocks which appear poised to deliver multibagger gains.
“My current theme is technology, digital technology, new age technology,” Kedia has disclosed (see Vijay Kedia’s Stock Reco Yields 70% Gain (In 5 Months). Check Out His Latest Stock Picks & Exits).
|Latest Portfolio of Ashish Kacholia|
|Stock||CMP (Rs)||Nos of shares held||Value (Rs Cr)|
|Shaily Engineering Plastics||638.60||599696||38.3|
|Apollo TriCoat Tubes||585.95||602863||35.3|
|Total Portfolio Value||770.53|
ADF Foods is the latest addition to the portfolio of Ashish Kacholia
ADF Foods, a micro-cap (Rs. 877 crore market cap), is the latest stock to be ushered into the portfolio.
Ashish Kacholia invested Rs. 5.62 crore and bought 1,48,871 equity shares at Rs 377.99 per share.
Ashish Ramchandra Kacholia acquired 1,48,871 equity shares in the company at Rs 377.99 per share on the NSE.
— Ashish Verma (@AshVerma111) September 15, 2020
ADF Foods Ltd manufactures a wide range of canned, bottled and processed vegetables, fruits and foods for the export and domestic markets.
The products of the company include pickles, chutneys, frozen vegetables, pastes, mango products, frozen entrees, instant mix, frozen wraps, flavoured water, tamarind products, ready meals and poppadum. The company plans on developing new products and processes under ready-to eat segment to enable them to continuously launch new products to widen its product portfolio.
Nigel D’Souza of CNBCTV18 had conducted an analysis of the stock a few months ago which is relevant even today.
Sunil Singhania’s Abakkus PMS Fund also holds ADF Foods
It is worth recalling that Sunil Singhania had stoked a controversy a few months ago when he had alleged that there is a “bubble” in the valuations of some high-quality stocks such as Nestle, Asian Paints, HDFC Bank, Kotak Bank, etc and that they are overvalued.
He also claimed that a “herd mentality” amongst fund managers is driving the stock valuations higher and higher.
This allegation was effectively countered by Saurabh Mukherjea.
Saurabh argued that the so-called ‘high-quality’ stocks have an unending runway ahead of them and that it is a misnomer to call their valuations a “bubble”.
In fact, Saurabh went to the other extreme and claimed that if investors buy such stocks “even at 100x P/E“, they would still make money.
Ultimately, Shankar Sharma was summoned to arbitrate the dispute and he ruled in favour of the high-quality stocks.
“Valuation is irrelevant in India,” Shankar held in an authoritative manner, putting an end to the controversy once and for all.
Respect you sir 🙏. Discussions are always welcome. And differing views is what makes the markets interesting.
— Sunil Singhania (@SunilBSinghania) November 22, 2019
A study of the latest portfolio of Sunil Singhania’s Abakkus PMS Fund reveals that proper attention has been paid to the concepts of diversification and allocation.
There is proper representation of varied sectors such as metals, brokerage, sugar, technology, finance, textiles etc.
The ‘ready-to-cook-and-eat’ or consumption sector is represented by ADF Foods.
|Latest Portfolio of Abakkus PMS Fund of Sunil Singhania|
|Stock||CMP (Rs)||Nos of shares||Value (Rs Cr)|
|Jindal Stainless (Hisar)||91.45||5000000||45.7|
|Balrampur Chini Mills||160.40||2400000||38.5|
|The Anup Engineering||587.05||503832||29.6|
|Somany Home Innovation||88.40||1987520||17.6|
|Siyaram Silk Mills||143.45||575000||8.2|
|Total Portfolio Value||453.3|
Dolly Khanna, Lashit Sanghavi & Ashwin Kedia were early investors in ADF Foods
Dolly Khanna was one of the first discoverers of ADF Foods since the time it was an unknown nano cap.
Unfortunately, she had some compulsions and sold the stock when it was still in its infancy.
Thankfully, Lashit Sanghavi & Ashwin Kedia have stayed loyal to the Company and remained invested through all the trials and tribulations.
As of 30th June 2020, Lashit Sanghavi holds 283750 shares of ADF Foods while Ashwin Kedia holds 250000 shares.
Lashit Sanghavi has revealed his investing game plan in an interview with Ramesh Damani.
He stated that big money is made when investors identify the correct trend, build a sizeable position and wait for the trend to come true.
Will Mutual Funds make a beeline for ADF Foods?
It appears that Mutual Funds have a very marginal holding in ADF Foods as of date.
As per the latest directive of SEBI, Mutual Funds are obligated to buy up to Rs. 35,000 crore worth of stock in small-cap and mid-cap stocks (see Best Small-Cap & Mid-Cap Stocks To Buy Now To Benefit From SEBI’s Compulsion That Multi-Cap Schemes Of Mutual Funds Should Invest 50% Of AUM In These Stocks).
It is reasonable to assume that ADF Foods will be one of the stocks which will come into the radar of the mutual funds and that it will benefit from the buying frenzy.
In a fast growing country like India, this will help smaller size companies to tap equity markets for growth funding. Lot of small companies are trading at extremely cheap valuations compared to their true potential
— Madhusudan Kela (@MadhusudanKela) September 11, 2020
Radhakishan Damani also buys ‘ready to eat’ stock
Radhakishan Damani, the visionary Billionaire investor, has also sent the clear signal that ‘ready to cook and eat’ stocks are the new trend.
He has bought a big chunk of stock in a company named ‘Foods and Inns’, a B2B supplier of food and condiments to MNCs.
Devina Khanna of Bloomberg has explained the logic behind the acquisition by the wily Billionaire.
— Devina Khanna (@khanna_devina) April 12, 2019
Which are the other ‘ready to cook/ eat stocks?
We will have to keep our eyes peeled for opportunities to buy the new trend.
The Basmati stocks like KRBL, LT Foods (Daawat), Kohinoor Foods, Chaman Lal Seti etc are obvious candidates.
There are also ‘snack’ stocks like DFM Foods and Prataap Snacks which appear to be immune from the slowdown.
Sakshi Batra of moneycontrol has explained the nuances of the two stocks in a succinct manner.
There are rumors on Dalal Street that Gits, which has a stranglehold over the Idli and Dosa readymix market, may be planning an IPO.
If so, we will have to grab the stock on the first day, first show!