Track record of Ashish Kacholia
Novice investors like you and me dare not ask Ashish Kacholia for his track record. He enjoys the same exalted status as our other eminent Gurus Dolly Khanna, Vijay Kedia etc.
We have to follow in their illustrious footsteps and rake in the mega bucks that come our way.
However, we are under the bounden duty to keep tabs on the latest portfolio of the Gurus because this helps us keep track of what stocks are being bought and sold by them.
Latest portfolio of Ashish Kacholia
Shares held by Ashish Kacholia as of 31st December 2016:
| Company | No of Shares (in Lakhs) | Rs Crore | YoY Gain (%) |
| APL Apollo Tubes | 5.50 | 56 | 47 |
| Pokarna | 4.41 | 54 | 70 |
| Shaily Engineering Plastics | 10.00 | 53 | (3) |
| Indo Count Industries | 24.96 | 43 | (13) |
| Parag Milk Foods | 15.80 | 41 | 5 |
| Gujarat Heavy Chemicals | 15.00 | 41 | 165 |
| S P Apparels | 9.25 | 35 | 29 |
| DFM Foods | 1.17 | 24 | 93 |
| Vadilal Industries | 3.81 | 20 | 10 |
| Genus Power Infrastructures | 45.66 | 19 | (28) |
| Zen Technologies | 24.98 | 19 | (19) |
| Ashiana Housing | 12.85 | 18 | 2 |
| MT Educare | 12.50 | 16 | (17) |
| Vishnu Chemicals | 5.34 | 15 | (4) |
| Shreyas Shipping | 5.75 | 14 | (13) |
| Vivimed Labs | 13.74 | 13 | 16 |
| Majesco | 3.33 | 13 | (34) |
| Acrysil (India) | 2.21 | 12 | (11) |
| AYM Syntex | 14.04 | 12 | (30) |
| Ester Industries | 15.03 | 7 | (29) |
As one can see from Ashish Kacholia’s latest portfolio, he has had a mixed year on a YOY basis. Some stocks like GHCL, DFM Foods, Pokarna, APL Apollo etc have given blockbuster gains while some have disappointed.
With regard to the stocks which are showing a YOY loss, we must remember that these stocks have notched up hefty multibagger gains in the immediate past and are now resting so as to be able to resume their upward trajectory. The fact that the stocks have given a negative return on a YOY basis does not mean that there is anything fundamentally wrong with them.
Track record of IDBI Capital
IDBI Capital has notched up an impressive reputation with regard to their stock recommendations. Let’s take a quick look at some of the recent ones:
(1) Stylam Industries (100% gain in eight months)
Stylam Industries was recommended by IDBI Capital on 20th May 2016 on the basis that it is “Decorating path for sustainable growth”.
The stock has surged like a rocket from Rs. 230 to Rs. 460, bringing cheer to investors at the 100% gain that has effortlessly flowed into their portfolios.
(2) Prima Plastics (63% gain in nine months)
Prima Plastics was recommended on 11th April 2016 on the logic that it is “Riding on the fast growth track …”
The stock has surged from Rs. 144 to 234, putting hefty gains of 63% on the table.
The stock is still a no-brainer given that it is backed by Shyam Sekhar, the noted value investor. The stock also comes heavily recommended by Nirmal Bang and ICICI-Direct.
(3) City Union Bank (35% gain in seven months)
City Union Bank was recommended on 21st June 2016 on the logic that the Bank is witnessing “healthy loan growth”.
The recommendation has worked out well because the stock has surged from Rs. 110 to Rs. 149, putting solid gains of 35% on the table in just seven months.
(4) Rain Industries (26% gain in just five weeks)
Rain Industries was recommended on 19th December 2016 on the logic that “Restructuring initiatives to drive earnings growth”.
On that date, the stock was Rs. 54. At the CMP of Rs. 68, handsome gains of 26% are on the table in just a couple of weeks since the recommendation.
Rain Industries is the favourite of Mohnish Pabrai, the investment legend, which implies that the stock has a long way to go.
So, as one can see, the wizards at IDBI Capital appear to know what they are talking about and so their recommendations cannot be taken lightly.
Ashish Kacholia’s latest stock pick – UFO Moviez
UFO Moviez India Ltd is Ashish Kacholia’s latest stock pick. As of 31st December 2016, he has emerged as the largest individual shareholder with 5,08,415 shares to his name. The investment is worth Rs. 22.57 crore at the CMP of Rs. 444.
UFO Moviez was incorporated with the vision of being an in-cinema advertising platform for single screens and small multiplexes with primarily non-premium demographics. To achieve its vision it pioneered the digital distribution of movies and has been a key contributor for digitization of cinema screens in India. With digitization of screens largely completed, UFO Moviez is geared up for sustainable and strong growth in its advertisement revenue lead growth in its In-cinema advertising and CARAVAN businesses.
“Worst hit by demonetisation”: Taking advantage of blues to load up
UFO Moviez’s stock price plunged from a high of Rs. 625 on 21st July 2016 to a low of Rs. 397 on 23rd December 2016.
Kapil Agarwal, JMD, came on record to say that demonetisation had affected the cinema business and that some advertisement contracts had been cancelled. UFO Moviez was labelled as one of the “worst hit”. He, however, assured that business is soon coming back to normal.
UFO Moviez Says Won't See Negative Growth In Q3 Ad Rev Despite Withdrawal Of Some Contracts. Expect Flat Or Marginal Growth In Q3.
— CNBC-TV18 (@CNBCTV18Live) December 22, 2016
Ashish Kacholia appears to have taken advantage of the weakness in the stock price to aggressively load up on the stock.
UFO Moviez has “revolutionized” Bollywood with digitization
According to a discussion between Sonali Krishna of ET Now’s Brand Equity, Sanjay Gaikwad, MD – UFO Moviez, Actor-Producer Aamir Khan and Producer Ritesh Sidhwani of Excel entertainment, the face of Bollywood is changing and there is a “revolution” brewing in the form of “digitization” of movies. The expert panel opined that UFO Moviez is in the position to capitalize on the changing trend.
Shah Rukh Khan’s latest blockbuster movie “Raees”
UFO Moviez appears to have played a big role in the release of “Raees”, the latest blockbuster movie of Bollywood superstar, Shah Rukh Khan.
According to a press release “UFO’s revolutionary technology empowers King Khan to interact with thousands of fans Live on screen across Mumbai, Delhi, Indore, Ahmedabad, Kolkata, Bangalore, Hyderabad, Jaipur, Surat and Moga”.
It is claimed that “Curtain Raiser enabled King Khan to launch the much-awaited Raees Trailer simultaneously in the theatres and gave him an opportunity to interact live with audience on Big Screen. The platform – ‘Curtain Raiser’, introduced by UFO Moviez, empowers a brand to interact live with audiences across their network of over 5000 screens”.
According to Taran Adarsh, an authority on movies, Raees is an “outright winner”.
#Raees movie review: SRK is sensational. There’s no stopping this one. An outright winner. Just don’t miss it! Link: https://t.co/qXs4liltKQ pic.twitter.com/Eh9BhMTNOg
— taran adarsh (@taran_adarsh) January 24, 2017
He also described it as a “sure shot hit”.
#Raees = SURE-SHOT HIT… SRK and Nawazuddin are the lifeline… A must must watch!
— taran adarsh (@taran_adarsh) January 24, 2017
A similar sentiment has been expressed by other knowledgeable observers such as Sunny Leone, Karan Johar and Dino Morea.
Loved @iamsrk in @RaeesTheFilm. You were absolutely amazing. Reminded me of all my years of watching gangster films! Best performance ever!
— Sunny Leone (@SunnyLeone) January 26, 2017
And….#RAEES has been watched and LOVED! Full on paisa vasool SUPERHIT!!! @iamsrk iamsrk nails the part to perfection! He's smouldering!!!
— Karan Johar (@karanjohar) January 25, 2017
#Raees top class film, @rahuldholakia brilliant cinema, @iamsrk uffff looking very good, superbbb performance @Nawazuddin_S ??????. Wowwww
— Dino Morea (@DinoMorea9) January 25, 2017
Shah Rukh Khan’s fans also appear to be gung ho about the movie:
##Raees is a RIOT today…. Morning shows starts with almost 80% occupncy all over India… Kolkata begins with 100% @iamsrk @rahuldholakia
— rohit jaiswal (@rohitjswl01) January 26, 2017
Fans Go Gaga Over #Raees ! Word of Mouth is Super Positive ! @iamsrk Fans loved your Performance ! @SRKUniverse @SRKCHENNAIFC @RaeesTheFilm pic.twitter.com/yoqJGtpZ9G
— Umair Sandhu (@sandhumerry) January 25, 2017
Prima facie, the success of ‘Raees’ will translate into big bucks for UFO Moviez.
‘Caravan’, the game changer?
UFO Moviez has introduced the concept of ‘Caravan’, in which movies are shown on a free-of-cost basis in mofussil and remote areas where there are no cinema theatres.
The catch is that the captive audience has to watch advertisements, which generates revenue for the Company.
UFO Moviez has projected in-cinema advertisement revenues of Rs. 100 crore.
UFO Moviez has “significant re-rating opportunity” with 70% upside potential: IDBI Capital
IDBI Capital has recommended a buy of UFO Moviez on the logic that the Company is “Geared for uptick in ‘in-cinema’ advertisement growth in FY18”.
The investment rationale is as follows:
“– We believe that the impact of demonetisation on UFO Moviez’s ‘in-cinema’ advertisement revenue would ease in Q4FY17. Given the strong movie slate, we expect up-tick in the growth in FY18 lead by growth in both Government and corporate segment driving a 29.2% YoY growth in ‘in-cinema’ advertisement. We forecast growth to sustain in FY19 (+31.2% YoY).
– We now forecast Caravan business to achieve EBITDA breakeven in FY19E. We await management’s outlook on this business.
– We factor relatively slower advertisement growth and cut our FY17E/18E revenue by 3.6%/6.4%. As a result, we cut our FY17/18E EBITDA and EPS by 8.3%/11.6% and 16.3%/16% respectively. We believe that our forecast has upside triggers from faster ramp-up in advertisement growth.
– We maintain that UFO Moviez has significant re-rating opportunity on the back of – 1) healthy earnings growth (we still forecast FY16-19E CAGR of 14%), 2) improving RoE (18% from FY18E onwards up from 13% in FY16), 3) FCF yield of 7.3%/9.6% in FY17/18E and 4) net cash B/S. We maintain BUY on UFO Moviez with new TP of Rs690 based on EV/EBITDA of 9x FY18F.”
It is also claimed that the CMP (Rs. 407) offers “deep value” and “ignores quality of earnings growth”.
“CMP offers deep value and ignores the quality of earnings growth
Even after the cut in our forecast, we expect UFO Moviez to generate FCF of Rs3.1bn over FY17- 19E. At CMP, even the FY17E FCF yield is at 7.3% and FY18E FCF yield is 9.6% which we believe is extremely attractive. Further, we still forecast RoE to improve to 17.7% in FY18E vs. 13.3% in FY16. Thus we believe, that the stock has significant re-rating potential and maintain our target EV/EBITDA of 9x FY18E. We maintain BUY with new TP of Rs 690.”
The target price of Rs. 690 predicted by IDBI Capital is a hefty upside of nearly 70% from the CMP.
Axis Securities also recommends buy with target price of Rs. 730
Axis Securities has echoed similar logic when recommending a buy of UFO Moviez.
The rationale is as follows:
“Ad revenue shines
UFO Moviez’ (UFOM) Q2FY17 ad revenue grew ~50% YoY, driven by healthy ad spends across government (up 94%) and private/ corporates (up 15% YoY). Ad revenue growth was driven by ~36% growth in ad volume (5.15 ad minutes/screen/show); ad realization improved ~13% YoY given benefits of differential pricing (based on movie content) for corporates, while government ad realization was stable YoY (DAVP realization). The management maintained its FY17 ad growth guidance at >30%, as H1FY17 ad revenue grew 29% YoY.
We expect UFOM to be the major beneficiary of ramp-up in ‘in-screen’ ad spends given (a) its successful strategy to aggregate ad inventory of single screens and (b) advanced technology offering more transparency and comfort to advertisers. Maintain BUY with TP of Rs 730 (8x FY18E EV/EBITDA).”
Conclusion – Apna Time Shuru
Ashish Kacholia’s endorsement of UFO Moviez coupled with the buy recommendations of IDBI Capital and Axis suggests that hefty gains are lying in store for investors to feast on. If this come true, novice investors like you and me can also mouth the memorable dialogue in Raees “Apna Time Shuru“!
Commenting on Pokarna: In same sector Divyashakti Granites Ltd fundamentals are great & Zero debts, around 50 cr of cash which is 50% of Market cap and YOY FCF is in increasing trend.
I think Divyashakti can bought instead of Pokarna.
This is something an off-beat idea of getting into UFO.