Fan Site: Inspired, Not Endorsed, By Rakesh Jhunjhunwala

Fear Grips Investors In “Next L&T” & “Next Page Industries” Stocks After Manpasand Fiasco



Investors merrily tucked into stocks with dubious credentials on the premise that they would blossom into “next L&T” and “next Page Industries” and shower multibagger gains. However, reality is now dawning upon investors that these may be junkyard stocks. Unfortunately, the exit doors are blocked and there is nowhere to run or hide




Auditors go into panic mode after crackdown by SEBI & Piyush Goyal

At one time in the past, auditors used to merrily sign audit reports without a care in the world.

All that one had to do was add a few carefully worded qualifications. The accounts could be fearlessly signed off as being “true and fair” after this.

However, Piyush Goyal, the illustrious Minister in NAMO’s government, sent the clear message that the shenanigans of the CAs would not be tolerated anymore.

“If all chartered accountants come together and decide that they will only practice honesty, then the problem of corruption in the country will be resolved,” he said in a stern tone, implying that there is rampant corruption in the manner in which CAs do audits.

He also accused CA’s of doing/ facilitating “टैक्स की चोरी” (Tax evasion).

NAMO also blasted the CA community for facilitating black money hoarders during demonetization by devising all sorts of illicit schemes.

Naturally, some CAs got their knickers in a twist at the plain-speaking by NAMO and Piyush Goyal.

However, public opinion is clearly supportive of the stance of the Hon’ble Ministers especially after the PNB NPA fiasco when the auditors were caught napping.

SEBI also moved swiftly and banned Price Waterhouse Coopers (PWC) from conducting audits.

However, the baffling aspect is that despite its dubious reputation and the ban by SEBI, PWC was chosen by the Government to investigate the PNB NPA scam.

Naturally, this aroused the ire of the intelligentsia.





Atlanta, latest victim of Auditor’s reluctance to sign alleged doctored accounts

An unknown micro-cap (Rs. 400 crore) named Atlanta Ltd is the latest where the auditors have developed cold feet.

Asha Ramanathan, the distinguished partner of PWC, dashed off a terse letter in which she accused Atlanta of not disclosing “adequate and relevant information and explanations”. She announced that because of this, PWC was resigning from the post of auditors.

The management adopted a belligerent stance and claimed that it was “quite astonishing” that the auditors resigned instead of “addressing on resolving off audit issues”.

As usual, investors bore the brunt of the stand-off between the management and the auditors.

Atlanta is locked in the 20% lower circuit and has effectively blocked everyone’s escape route.

Atlanta Ltd Stock Price, Share Price, Live BSE NSE

The MMB punters at the Atlanta counter make a pitiable sight.

“How many LC. …….????????” one punter sighed, resigned to his fate.

“Dhoka. …..Fraud. ……Loss to Investors. …..,” another wept, his voice choking.

Shankar Sharma expresses contempt for Big-4 auditors

Shankar Sharma was vicious in his criticism of the Big-4 auditors.

“I will never invest in a company that's audited by the so- called Big 4,” he fumed.

However, not all of Shankar’s followers were convinced by his stance.

Dilip Buildcon: From “next L&T” to “next Manpasand/ Vakranjee”

Dilip Buildcon’s description as the “next L&T” was not made by over-enthusiastic punters but by Rohan Suryavanshi, one of the head honchos of the Company.

However, rumors of a dispute with the auditors suddenly surfaced and sent the stock tanking like a ton of bricks.

The management speedily clarified that all is well between them and the auditors.

However, questions began to be asked whether Dilip Buildcon is the “next Manpasand” and/or “Next Vakranjee”.

Naturally, some savvy investors did not want to wait to find out the answer. They bailed out in a hurry, sending the stock spiraling downwards.





Kitex Garments, no more “Next Page Industries”

Today, it sounds atrocious that anyone would have the temerity to describe Kitex Garments as the “next Page Industries”.

Yet, even distinguished stock pickers like Ravi Dharamshi were taken in by Kitex’s charisma and opined that the stock was comparable to Page Industries and would give “fantastic returns”.

Ravi Dharamshi fairly admitted later that Kitex Garments was a “mistake” and that he had exited it before it could cause large damage to his portfolio.

However, Prof Sanjay Bakshi, the authority on value investing, has maintained stony silence over Kitex Garments.

The Prof is the original discoverer of Kitex Garments. He had written an elaborate “teaching note” titled “The Importance of Unconventionality” in which all the virtues of Kitex were enumerated in glossy detail.

(Unfortunately, the note is now deleted from dropbox).

When the stock sank amidst rumors in the valuepickr forum that things are amiss in Kitex Garments, the Prof launched a defiant and no-holds-barred buying action to average the original buying price.

As of 31st March 2018, the Prof’s ValueQuest India Moat Fund holds a treasure trove of 14,72,235 shares of Kitex Garments.

Some knowledgeable experts have boldly described Kitex Garments as the “Next Vakranjee” and a “house of cards” which means that the sensible strategy would be to exit the stock with whatever can be salvaged from it.

What ails LEEL, Porinju Veliyath’s crown jewel stock?

Porinju Veliyath has adopted the strategy of taking concentrated positions in his high-conviction stock picks.

In LEEL (alias Lloyd Electric), Porinju’s EQ India Fund holds a mammoth quantity of 3,303,473 shares as of 31st March 2018.

This holding comprises of 8.19% of LEEL’s equity.

Unfortunately, today the stock tanked and tripped the lower circuit of 20%.

The stock has lost 30% on a YoY basis.

According to the MMB punters, the Q4FY18 results are “disastrous”.

When I last checked, the punters were in a foul mood due to the unending excuses offered by the management.

Porinju has stated that if investors were earlier rationally bullish about a stock at a higher price, they should be even more bullish about it at lower prices.

We will have to wait and watch whether Porinju acts on his own advice and buys more of LEEL or prefers to wait on the sidelines for the dust to settle.

Some punters are also suggesting that Porinju should storm into the Board of Directors of LEEL and demand a seat.

Prima facie, this is a good idea because if Porinju becomes an “activist investor” like Billionaires Carl Icahn and Bill Ackman, it will send the fortunes of LEEL surging upwards!








investments, Mid Cap, Multibagger, Portfolio, scam, stock picker    , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

13 Comments
  1. Say no to pms's Gravatar Say no to pms
    May 31, 2018 at 10:26 pm | Permalink

    Leel eletrical 20%lc…sarda plywood..falling knife…kitex..kati patang…only when the tide goes out you know who is swimming naked!!!..invest always in the best quality not some junk advised by some pms babas

    Reply
  2. Piyush's Gravatar Piyush
    May 31, 2018 at 10:28 pm | Permalink

    Even at rs10 it isnt a screaming buy…sell and run

    Reply
  3. Suraj's Gravatar Suraj
    June 1, 2018 at 1:39 am | Permalink

    Skeletons are tumbling out from so called multi baggers suggested by Gurus. The fall has just begun. Many more will follow vakrangee

    Reply
  4. foo's Gravatar foo
    June 1, 2018 at 10:59 am | Permalink

    Strange that Prof has deleted his Kitex thesis from Dropbox. It should have been a good learning experience. In the end, turns out all this gyan works only if stock moves up, else its useless cr@p.

    Reply
  5. Django's Gravatar Django
    June 1, 2018 at 11:00 am | Permalink

    Look who is speaking about corruption. Piyush goyal who is himself involved in a 650 crores scam. Sau choohe kha ke, billi haj ko chali…roflmao

    Reply
    • gem23's Gravatar gem23
      June 4, 2018 at 6:27 pm | Permalink

      The biggest and most corrupt are sitting in the central Cabinet. Any idea about the Highways and Ports minister from Maharashtra who once had his driver, mali and sundry as fellow directors of his company to siphon off funds? With all investigative departments in the govt’s hand (esp IT, CBI, MoCI, ED), there has been no check on any of these powerful ministers affairs during or after the demonetisation saga – how much money was laundered by them at that time? There were big rumours that the RS2000 bundles were reached privately to many capitalists (by who else than the govt officials?) and also rumours that the old notes were used to buy real assets prior to the announcement. More than 60000 crores is allotted for highway development, but hardly any devt is being seen in highways, barring PPP models where toll companies spend all the money and recover from the commuters.
      And bigger surprise is, the CAG, which was so active prior to 2014, has gone to sleep completely. Not a single report has been tabled in Parliament to my knowledge. Is everything hunky dory?
      The alleged fraudulent companies that are coming out in the open now are from Gujarat (Manpasand) or Maharashtra (Atlanta, Vakrangee) – these two states (with blessings of BJP bigwigs) seems to have taken over from Hyderabad (Satyam et al).

      Reply
  6. krish's Gravatar krish
    June 1, 2018 at 5:01 pm | Permalink

    Market behaviour is selecting bride. Jain Irrigation with excellent fundamentals is languishing with PE of 14 (2019), whereas people go behind Vakrangee and PCJ.

    Reply
  7. augustus's Gravatar augustus
    June 1, 2018 at 5:47 pm | Permalink

    Old D street saying pump and dump! Don’t forget that. However it is a mystery that the activities have been carried out under the nose of the regulator and today thousands of crores have been lost of investors, not gullible this time since these are accounting frauds and beyond the balance sheet statements!

    Then who shall protect the investors?

    Reply
  8. augustus's Gravatar augustus
    June 1, 2018 at 6:05 pm | Permalink

    Some big fund managers are against the big 4, but not supporting those who expose the accounting scandals! How ethical! Perhaps that is how they are so big!!

    Reply
  9. Kharb's Gravatar Kharb
    June 1, 2018 at 6:06 pm | Permalink

    This is not end but just Start of Blood Bath in poor Quality Stocks, many of these may be just showing false profit and sales no and it can not go on as they will be unable to deposit income taxes for long .It always happens when ever market goes up and investors are always warned but they will just blindly buy .

    Reply
  10. Abhijeet's Gravatar Abhijeet
    June 1, 2018 at 7:42 pm | Permalink

    Sir, any clue why Majestic research is also spiralling down?

    Reply
  11. rao's Gravatar rao
    June 2, 2018 at 2:09 pm | Permalink

    if all politicians decide to curb corruption than there would be nothing like india

    Reply
  12. Nrupen | Techno Fundamental Analyst's Gravatar Nrupen | Techno Fundamental Analyst
    June 20, 2018 at 1:32 pm | Permalink

    I am no longer hopeful on Leel

    Reply

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