Dolly Khanna’s fascination for the textiles sector is well known to us. Her portfolio of glittering multibaggers has two representatives of the textiles sector in it. The first is Nandan Denim which Dolly bought in the quarter ended 31st March 2015. The second is RSWM which she bought in the quarter ended 30th June 2015 quarter. The reason why Dolly bought these two stocks is easy to understand. While Nandan Denim is a “growth” stock with the potential for high gains and the attendant risk, RSWM is a “high dividend yield” stock, which can cushion some of the risk from the former.
One can see this in the performance of the two stocks. While Nandan Denim is up 100%+ (assuming Dolly purchased on 1st March 2015), RSWM is up 35% (assuming Dolly purchased on 1st June 2015).
Undoubtedly, these gains are spectacular and heavily out-perform the Benchmark Indices. In fact, leading experts have expressed the view that the future is very bright for textile companies owing to the fact that India has a minuscule share in the Global textile market (see opinion of experts on this issue).
It is no surprise, therefore, that Dolly has been itching to increase her exposure to textile stocks.
In the quarter ended 31st March 2016, Dolly has shored up her holdings in Nandan Denim from 5,06,754 shares to 5,12,218 shares and that in RSWM from 2,87,542 shares to 4,24,220 shares.
Not content with this, Dolly has also scooped up a massive chunk of 560,176 shares of Nitin Spinners and given it pride of place in her portfolio. Her investment in Nitin Spinners is worth Rs. 3.69 crore at the CMP of Rs. 66.
Dolly’s total exposure to the textiles sectors presently stands at Rs. 24.35 crore based on the respective CMPs of the three stocks.
Luckily, we don’t have to exert ourselves too much to understand the nuts and bolts of Nitin Spinners because Daljeet Kohli has already done all the hard work and handed over the information to us on a platter.
In a report dated 14th December 2015, Daljeet has made the compelling argument that Nitin Spinners is a good investment opportunity owing to its’ high RoE and industry dynamics. He has emphasized that the aggressive expansion plans undertaken by the Company will result in a “game changing” experience for it.
Daljeet’s price target for Nitin Spinners is Rs. 112 which is a whopping upside of nearly 72% from the CMP of Rs. 66.
We must bear in mind that Dolly’s optimism for the textiles sector is shared by the entire phalanx of savvy investors ranging from Billionaire Narayana Murthy (Ambika Cotton), Ashish Kacholia (Welspun), Prof Sanjay Bakshi (Ambika Cotton, Kitex Garments), Porinju Veliyath (Vardhaman Textiles, Gokuldas Exports), Kenneth Andrade (Ambika Cotton), Anil Kumar Goel (RSWM) etc.
In my view, novice investors like you and me cannot afford to be mute spectators. Instead, we have to ensure that our respective portfolios have a proper representation of textiles stocks and take immediate corrective action if there is a shortfall. Then, we will be able to stand shoulder to shoulder with the savvy investors when the day of reckoning arrives and the riches begin to flow!