Few people would have heard of Lokesh Machines Ltd. At least, I hadn’t heard of it till it flashed on my radar as one of Ashish Kacholia’s latest stock picks.
Lokesh is a micro-cap with a market cap of about Rs. 100 crore. It is engaged in the business of manufacture of “high precision CNC Machines”. It boasts of having supplied to marquee clients like Volvo, Eicher, Honda, Caterpillar, Mahindra, Cummins etc. It also claims to be “the first Indian company to deliver a complete range of special purpose machines of machine Euro VI compliant cylinder blocks & heads” to Volvo.
|Lokesh Machines’ Financial Results|
|Figures in Rs crore||2014||2013||2012|
|Profit After Tax||0.46||1.06||7.60|
|Operating Profit Margin (%)||25.69||22.32||22.00|
|Net Profit Margin (%)||0.41||0.74||4.64|
|Earning Per Share (Rs)||0.31||0.77||6.37|
On 30th March 2015, Ashish Kacholia obtained 16 lakh shares and warrants of Lokesh Machines at Rs. 50 each. At the CMP of Rs. 91, Kacholia’s investment is worth Rs. 14.56 crore. Also, gains of 82% are already on the table.
Ashish Kacholia has earlier given us a glimpse of his visionary abilities by grabbing truckloads of defense related stocks like Zen Technologies, Axiscades and Dynamatic Technologies. Today, as billion dollar defense deals are being announced by NAMO, everyone is clamouring for a slice of these companies.
Ashish Kacholia’s logic for investing in Lokesh Machines appears to be that it is the ideal play for NAMO’s ‘Make-in-India’ credo. Lokesh already has all the technology in place to make sophisticated machinery. It has also won the confidence of elite clients like Volvo, Caterpillar etc. So, it is only a matter of time before Lokesh announces a big-ticket tie-up or collaboration for a ‘Make-in-India’ project.
When that happens, we will have another reason to compliment Ashish Kacholia for his brilliant foresight.