Dolly Khanna’s latest stock pick: Visaka Industries
Dolly Khanna’s modus operandi while buying stocks is to visit Dalal Street in a stealthy manner.
Such is her mastery in stealth and disguise that even I, despite my 24×7 vigil on Dalal Street, could not detect her presence when she came shopping.
Anyway, Dolly can never keep her purchases a secret from her devoted fans for too long.
According to the latest top-secret information accessed by me, Dolly is now the proud owner of 115,968 shares of Visaka Industries as of 31st March 2017.
The holding as of 30th June 2017 is not known.
The investment is worth Rs. 5.89 crore at the CMP of Rs. 508.
The data shows that Dolly visited Dalal Street on ten occasions to make her purchases.
On one occasion (9th December), Dolly had to be content with buying only two shares due to the absence of sellers.
However, she has been relentless in her pursuit of the stock and came back later to persuade the sellers to part with their holding.
|Date||Nos of shares bought||Total holding|
Anil Kumar Goel sells stock, realizes folly and takes U-turn
Anil Kumar Goel held 223,000 shares as of 1st April 2016.
In a surprising move, he started dumping his holding as can be seen from the chart.
|Date||Purchase/ (sale)||Total holding|
|Op Bal as of 01.04.2016||
In fact, on one occasion (21st October), he crossed Dolly’s path. He sold 2000 shares of Visaka which Dolly scooped up.
On 25th November, Anil Kumar Goel realized that he is making a colossal mistake by selling Visaka (especially when Dolly was buying them).
He immediately staged a U-turn and bought a chunk of 10,000 shares to make good the folly.
Anil Kumar Goel’s holding in Visaka as of 31st March 2017 stands at 2,20,000 shares which is worth Rs. 11.17 crore as of date at the CMP of Rs. 508.
The holding as of 30th June 2017 is not known.
Huge multibagger gains from Visaka Industries
The two stalwarts have raked in a massive fortune from Visaka Industries.
The YoY gain is itself an eye-popping 222%.
If one looks at the gains since Dolly’s first purchase of 20th May 2016, massive gains of 275% are on the table.
This shows that Dolly Khanna is the ultimate master of timing.
Visaka Industries is a beneficiary of Porinju Veliyath’s “Trillion dollar opportunity in housing and infra” theory
Prima facie, it appears that Visaka Industries is a beneficiary of the “Trillion Dollar opportunity in Housing & Infra” referred to by Porinju Veliyath whilst recommending Everest Industries and Ramco Industries to us.
10x in 3 yrs! Many more KNRs in making
Trillion Dollar opportunity in Housing & Infra coming up, Grab it! https://t.co/2h7d3HW1Nv
— Porinju Veliyath (@porinju) May 9, 2017
It is worth noting that Visaka and Everest are arch rivals in the market place.
Porinju appears to have recommended Everest Industries because it underperformed Visaka Industries on a YoY basis.
The recommendation has worked out well with Everest Industries having given a gain of 34% since then.
However, Ramco Industries is more or less flat since then.
Is Srikalahasthi Pipes a good stock to play the infra theme?
Dolly Khanna and Anil Kumar Goel are both bullish on Srikalahasthi Pipes.
While Goel holds 948,200 shares as of 31st March 2017, Dolly holds 636,313 shares.
|SRIKALAHASTHI PIPES LTD – KEY FUNDAMENTALS|
|MARKET CAP||(Rs CR)||1,385|
|EPS – TTM||(Rs)||[*S]||35.27|
|LATEST DIVIDEND DATE||18 AUG 2016|
|BOOK VALUE / SHARE||(Rs)||[*S]||204.61|
[*C] Consolidated [*S] Standalone
|SRIKALAHASTHI PIPES LTD – FINANCIAL RESULTS|
|PARTICULARS (Rs CR)||MAR 2017||MAR 2016||% CHG|
Entry barriers + competitive advantages make Srikalahasthi Pipes a good buy: Reliance Securities
Reliance Securities has painted a rosy picture of Srikalahasthi Pipes with the following logic:
“SPL is an Andhra Pradesh based integrated manufacturer of Ductile Iron (DI) pipes. Since it is integrated, it enjoys significant competitive advantage, while several cost-optimization measures – including commissioning of Sinter Plant – has led to sustained margin expansion
– Lack of adequate sanitation has been prompting the government to focus on improving water supply and sewerage infrastructure through multiple schemes like JNNURM & Swachh Bharat Mission and “Smart Cities Mission”. Thus we believe that the demand for DI pipes would witness a healthy growth in medium to long-term
– DI pipes – which are widely recognised as the industry standard for modern water and waste water system – find application in water transportation and sewage management
– With ~75% market share in Southern & Western markets augers well for SPL, as the industry enjoys strong entry barriers for being capital intensive having long gestation period”
Capacity expansion & demand revival augers well for Srikalahasthi Pipes: Religare
Religare has recommended a buy of Srikalahasthi Pipes on the following logic:
A strong play in water infrastructure space…
– The Government’s continued thrust on water supply & sanitation infrastructure is reflected in steady increase in its allocations through related schemes over the years.
The Ministry of Drinking Water & Sanitation has been allocated Rs 200bn for FY18 (up 21% over FY17). The allocation under PMAY increased by 53% to Rs 230bn for FY18.
Further, open defecation free villages have now been given priority for piped water supply. This should boost the demand for DI pipes.
With market leadership & steady capacity additions, SPL is well placed to capitalize on the available opportunities.
– SPL commands ~15% market share in DI pipes market across India and ~75% in South & Western Zone, which it primarily caters to. It has a fully backward integrated manufacturing facility which includes a sinter plant, coke oven plant, power plant and sewage treatment facilities, thus giving it a significant cost & competitive advantage.
– Alliance with Electrosteel Castings (ECL) has clearly provided SPL a strategic advantage. The experience and brand image of ECL in Ductile Iron Pipes arena in the domestic and export market has / would continue to help SPL for its DI Pipes business growth. ECL’s technical expertise has been adopted in SPL’s various backward and
forward integration projects, thus providing it competitive edge.
– SPL has recently expanded its DI pipes capacity by 75,000 TPA at its existing facility, which has become operational in Q4FY17. The company has also undertaken upgradation and modification of Blast Furnace. This should enable it meet its future demand requirements for DI pipes. Further, SPL is installing an additional coke oven battery and is enhancing its power plant capacity by 1.5MW, which is expected to go on stream by Q4FY18. This should result in meaningful cost savings.
– Led by capacity expansion and demand revival, SPL’s revenue and PAT are estimated to grow at a CAGR of 15% & 21.4% over FY17-19E with improved volume offtake. While growth in FY17 was subdued, we expect a meaningful revival over the next two years.
Higher input cost could keep the EBITDA margins under pressure in FY18E. However, we expect the same to improve in FY19E, led by better capacity utilization and backward integration initiatives. At CMP of Rs 320, SPL is trading at 6.2x FY19E EPS. The company deserves to trade at better valuations, given its impressive track record of growth, leadership position in DI pipes, bright growth prospects and declining debt-equity. We recommend a BUY on the stock with a target price of Rs 416.”
Are Kridhan Infra and SPML Infra good buys as well?
We also have to keep an eye on Kridhan Infra and SPML Infra.
Mudar Patherya has assured that SPML Infra is at “inflection point” which means that the stock is expected to rocket into the stratosphere sooner or later.
DD Sharma has come in strongly with a buy recommendation for Kridhan Infra.
His recommendation is supported by BoB Capital which claims that gains of upto 99% are waiting to be harvested from the micro-cap.
It is quite obvious that all five stalwarts, Dolly Khanna, Porinju Veliyath, Anil Kumar Goel, Mudar Patherya and DD Sharma, are bullish about the infra boom that is going to be unleashed soon.
If we remain mute spectators, we will cut a sorry face. Instead, we need to urgently grab our respective favourite infra stocks and prepare for the gains to gush into our portfolios!