Fav Stock Of Mohnish Pabrai, Porinju Veliyath, Ashish Chugh & Shyam Sekhar Is Good Buy Now: Nirmal Bang

Balaji Amines gave 739% gain after Ashish Chugh assured that it would be re-rated

Ashish Chugh is probably one of the first discoverers of the potential of Balaji Amines.

As far back as in Jan 2011, Ashish recommended a buy of Balaji Amines with the confident assurance that the Company was headed for re-rating.

“This company caters to a wide range of industries starting from pharmaceutical to agrochemicals. It also caters to the chemical industry and FMCG in a small way. Almost all pharmaceutical companies whether Indian or international, the major international companies, are the customers of Balaji Amines,” he said in his typical soft-spoken voice.

He also made good his proposition by drawing attention to the fact that while the equity base of Balaji Amines is tiny, the sales and profits are growing at a ferocious pace.

The re-rating did happen sooner than Ashish Chugh expected. The stock spurted from Rs. 40 to Rs. 361, putting mind-boggling gains of 739% on the table.

Porinju Veliyath assured that Balaji Amines would give “more gains that Page Industries, Kitex Garments, Sun Pharma”

Porinju’s interview of March 2015 is a sore point for us because we studiously ignored all three stocks that he had recommended. Unfortunately for us, all three stocks have given multibagger gains and we missed out on a massive bonanza.

Exalted companies lag behind with pathetic returns

It is interesting to note that Porinju’s assurance that these three little known stocks will give more gains than exalted companies like Page Industries, Kitex Garments and Sun Pharma has also come true.

While Page Industries has given a princely return of 1.5% since 20th March 2015, Kitex Garments has lost 22% in the same period.

Sun Pharma has fared even worse by losing 36% in the same period.

So, maybe Porinju’s advice that we should stop obsessing about so-called high-quality and high P/E stocks and instead buy a basket of so-called low-quality companies at dirt-cheap valuations has some merit after all.

Mohnish Pabrai muscles his way into Balaji Amines

Mohnish Pabrai is famous for his declaration that he does “not buy any stock which has less than 5x multibagger potential”.

Of course, this is not an empty boast but is backed by a stellar track record of hefty gains over a distinguished career of several decades.

Mohnish’s PMS fund called ‘The Pabrai Investment Fund IV LP’ is sitting pretty on 607,204 shares of Balaji Amines as of 31st March 2017.

[*C] Consolidated     [*S] Standalone    

(Source: Business Standard)

Shyam Sekhar holds big chunk of Balaji Amines

Shyam Sekhar’s activities in the stock market cannot be ignored because he also has several mega multibaggers to his credit. He was spotted with 183,561 shares of Balaji Amines as of 31st March 2016. His family members collectively hold another lot of 208,000 shares as of that date.

The present holding of Shyam Sekhar and of his family members is not known.

Nigel D’Souza’s recommendation yielded 145% gain

Nigel D’Souza’s Mid-cap mania show deserves to be paid more attention given the number of multibagger stocks that he has unearthed.

We saw earlier that his analysis of Panama Perochem, a stock in which Dolly Khanna, Anil Kumar Goel, Madhukar Sheth and Chetan “Jeetay Investments” Parikh are sitting pretty, was brilliant. The stock shot up like a rocket soon after Nigel covered it.

The same thing has happened in Balaji Amines. After Nigel D’Souza put the spotlight on it, the stock has taken off and posted massive gains of 145% in just about 14 months.

Balaji Amines +145% coveraged exactly 1 yr back on #midcapmania @CNBCTV18News @CNBCTV18Live
https://t.co/EyjIeHk1gG

— Nigel D'Souza (@Nigel__DSouza) March 28, 2017

Nirmal Bang recommends buy

Runjhun Jain of Nirmal Bang has expert knowledge of Balaji Amines. She understands all the nuances of the Company and of what makes it tick.

Balaji Amines reported so-so Q4FY17 results and this caused the stock to correct a bit.

However, Runjhun Jain has explained that the so-so results were caused by temporary factors and opined that the weakness in the stock is the golden opportunity to tuck into the stock. Her views are as follows:

“Steady quarter

For FY17-19E we expect the company’s sales to grow by 16% and PAT by 24% (as interest cost is likely to come down and with no major capex lined up depreciation is likely to be stable at current levels). BAL is leading amine player and enjoys handsome market share in its basket of products. It is consistent dividend paying company. We maintain our positive outlook given the improvement in ROCE and ROE with positive free cash flow. We recommend BUY on the stock for price target of Rs 485 (12x FY19E).”

Conclusion

We have to ponder over Runjhun Jain’s advice seriously because if four illustrious investors have shown confidence in a stock, it obviously means that the stock has the potential to deliver multibagger gains in the near future. We shouldn’t be caught in the sorry position of having missed out on yet another bonanza!