Basant Maheshwari gave a talk in connection with his debut book “The Thoughtful Investor”. I have already reviewed the book here and identified its salient points.
What is more important is that Basant Maheshwari was asked a pointed question on what stocks one should buy keeping in mind the reforms process to be implemented by Narendra Modi.
Basant was of the opinion that the result of NaMo was that there would be huge rural spending and massive urbanization with a number of Tier 2 and Tier 3 cities coming up.
“Semi urban and rural India is where the big money is now” Basant said. “Look at products and services that are under-penetrated in these sections of the Indian economy”, he added.
Cera Sanitaryware:
Basant took a cue from Narendra Modi’s slogan “Pehle Sauchhalya Phir Devalaya” (first toilets and then temples) to home in on Cera as a major beneficiary of NaMonomics.
Cera has a market cap of only Rs. 1200 crore and it is operating with dominance in a country with 120 crore population where 50% don’t have a toilet means. Cera has incredible scalable opportunity, Basant said.
Basant cautioned that the fact that Cera has shot up in the recent past and hit the UC should not deter you from investing in it. “You have to look at the long-term scalable opportunity” he said with a sparkle in his eyes. (See also Is Cera still a good stock to buy?)
(Basant talks about rural India’s prosperity, Cera etc at 1.23.30 onwards)
Kajaria Ceramics/ Symphony Coolers:
Kajaria, the manufacturer of ceramic tiles, is on the same lines as Cera. It will be a massive beneficiary of the urbanization boom with new housing complexes, malls etc and it has a market cap of only Rs. 1,000 crore, he said.
(See also PN Vijay Stock Pick Kajaria Ceramics Gives 400% Return)
Basant made a reference to Symphony Coolers in the same spirit.
Gruh Finance/ Repco Home Finance:
“Rural low ticket mortgage is going to be huge” Basant said. He pointed out that Maharashtra, Gujarat & Tamil Nadu constitute more than 50% of India’s mortgage market and that if an investor had Gruh Finance and Repco Home in his portfolio, he had that market covered.
(Click here for when Basant first recommended Repco Home Finance)
Both stocks have an inherent strength and a “moat” because they deal with small ticket borrowers who have the earning power but without the documentation to support it. Banks are not interested in such customers even though they present a huge potential.
Basant also pointed out that because the loans are given against immovable properties (which are appreciating assets), the risk of a NPA is low. “It is a challenge to lose money by lending against the security of a house” Basant said.
The market cap of these stocks at Rs. 2000 to Rs. 6000 crore is also low. There is a huge opportunity and it is a 20 year story Basant emphasized.
Basant also drew inspiration from Fannie Mae & Freddie Mac, the US based mortgage companies, which have a $57 Billion capitalisation.
In contrast to their USA counterparts which face stiff competition from Banks, Gruh & Repco have a “free ride” Basant said with great confidence in his voice.
Speaking for myself, I think there is great merit in Basant’s advice. It is logical and makes a lot of sense. I already have Cera, Kajaria & Repco Home in my portfolio. I intend to keep adding to them in a slow and steady manner.
Basant Maheshwari’s Two favourite super duper multi bagger stocks; Page & Hawkins have not been mentioned here.Both these stocks can still become 10-20 times from the current levels.
Regret that these stocks he was giving to his private subscribed clients now come under Namo stocks . I have his reports and is being recommended for over 2yrs
Had he mentioned that these stocks being given already to my clients at so and so prices i wonot have made this remark
this talk is to enhance his and his clients wealth in the first place
The more interviews and book launches Basant does, the more he talks up his stocks, and the more they go up. Smart…
HOW ECONOMY WILL GROW?
HOW MARKET WILL SCALE NEW HIGH?
After getting unexpected glorious response from Indian public in 16th LS poll.
Now Modi government blaming UPA govt. and say’s pubic to prepare for sour test of Modi government by increasing higher TAXES (various new direct-indirect) in coming budget
What Gujarat C.M. Anandiben Patel will do?
She will blame Modi for huge Debt burden on Gujarat Government?
FDI and FII are real source to improve nation’s economic condition?
Will “Modi sarakr” check diesel and petrol price and control them?
WILL INFLAMATION COME DOWN?
I HEARED FROM MOST OF BJP LEADERS NOTHING TO DO.
IN CONGRESS RULE ALL PAYING FOR OUT OF RULL WORK IN BJP RULE ALL PAYING TO DO LEGAL WORK.
WITHIN 1 YEAR PUBLIC WILL FEEL THEY BECOME FOOL
i m not able to see the stock name can any one say how yo see that
Good for investors
Some correction is needed in your market cap figures. AS of 17th Sep 2014 – 1:20 pm, market cap figures for the following companies are :
1) Cera Sanitary Ware – 2056
2) Kajaria Ceramics – 4913