Check Out The Latest Stock Pick Of Prof. Sanjay Bakshi’s ValueQuest Moat Fund

Prof. Sanjay Bakshi’s USP is that he is not like the typical professors who bore us with unending theoretical discussions. Instead, he explains the theory with practical case studies of real-life companies.

Recent examples of Prof. Sanjay Bakshi’s lectures – cum – case studies are Thomas Cook, Relaxo Footwears, Kitex and Ashiana Housing. Some earlier examples are NESCO and Eicher Motors. Each stock has given mind-blowing returns and thrilled Prof. Bakshi’s fans and students.

Prof Sanjay Bakshi is one of the two managing partners of ValueQuest Capital LLP. ValueQuest Capital LLP is stated to be a “boutique investment advisory firm”. It is stated to advise some of “India’s largest family offices in making conservative but meaningful, long-term public market investments”.

ValueQuest is also sub-advisor to “ValueQuest India Moat Fund”.

It is not known what the AUM of the ValueQuest India Moat Fund is. However, it does not have any big-ticket investments as far as my research shows.

ValueQuest India Moat Fund’s latest stock pick is Poddar Developers, a micro/ small cap company with a market capitalisation of only Rs. 590 crore. In the December 2014 Quarter, the ValueQuest India Moat Fund bought 65,322 shares of Poddar Developers. At the CMP of Rs. 1136, the investment is worth Rs. 7.42 crore.

Poddar Developers appears to be doing quite well if you go by the results for the financial year 2013-14. It has a project at ‘Bhivpuri’ where possession of all 79 buildings consisting of 1264 flats has been given as on March 2014. It also has a project at ‘Badlapur’ where Phase I has been sold out and possession has been given of all 492 flats as on March 2014. Phase II of the Badlapur Project has seen sale of 560 flats and 11 shops out of 582 flats and 45 Shops respectively as on March 2014. Almost 90% of the construction work has been completed. Phase III of the Badlapur Project has seen sale of 329 flats out of 680 flats as on March 2014.

Poddar Developers has a subsidiary named Poddar Habitat Pvt. Ltd which is executing “Poddar Navjeevan” at Atgaon near Shahpur. This project is also stated to be running “in full swing” with 15% construction completed till March 2014. The First Phase has 36 buildings consisting 1 RK and BHK Flats. The response for this Project has also been very encouraging and Company has sold 274 flats out of 576 flats.

Poddar Developers’ latest project is called “Poddar Aspire” and it is based at Teesgaon, Kalyan.

There is also an impressive “Investors’ Presentation” of January 2015 that gives you all the data about the Company and its future plans.

Financially, Poddar Developers appears to be on a strong footing. The consolidated turnover and other income for FY 2013-14 surged to Rs. 69.18 crore as against Rs. 30.75 crore during the previous year. The net profit, however, remained flattish at Rs. 7.88 crore as compared to the profit of Rs. 7.66 Crores during the previous year. The six month results ended 30th September 2014 are also quite impressive with the net sales shooting up to Rs. 73.40 crore as against Rs. 34.64 crore in the preceding six months and the net profit for the period surging to Rs. 14.06 crore as compared to Rs. 4.66 crore. Also, the company has low leverage. The total long-term borrowings as of 30th September stands at Rs. 13.58 crore, which compares favourably with the shareholders’ funds of Rs. 80.95 crore as of that date.

So, from all accounts, it does look like Poddar Developers is on a strong footing.

The notable aspect is that Poddar Developers is, like Ashiana Housing, focusing only on Tier II and Tier III cities. It is building low-cost and affordable housing for the masses for which there is no dearth of demand.

Now, what we have to watch is which of the two realty companies will outperform in the medium term.