Vijay Kedia Discusses three multibagger stocks in his portfolio

Discussion in 'Must-Read Interviews, Articles & News Items' started by Arjun, Nov 23, 2020.

  1. Arjun

    Arjun Chief Executive Officer (CEO) Staff Member

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    Vijay Kedia has explained the investment rationale for his old and new investments in a recent interview to ET.



    Sudarshan Chemicals

    Sudarshan Chemicals is one of Vijay Kedia's old favourite stocks and is a high-conviction investment.

    It was in the news a few days ago because HDFC Securities has issued an initiating coverage report and recommended a buy.

    HDFC Sec has pointed out that Sudarshan Chemical is leaping into league of giants an is on the path to becoming the third-largest pigment manufacturer globally & is in a sweet spot to seize opportunity of exit of global players

    Kedia agreed with this rationale of HDFC Sec.

    From nowhere to the world’s third-largest company in speciality pigments, Sudarshan is competing with global giants like BASF and Clariant, among others. The company is now aspiring to become the second largest. The addressable market size is more than $10 billion whereas they are not even at $1 billion as of today,” he said about Sudarshan Chemicals.

    Tejas Networks

    Tejas Networks is one of Kedia's recent investments.

    The company is an optical and data networking products company that specialises in providing design, development of high-performance and cost-competitive products to telecommunication and internet service providers, utility companies, defence firms and government entities situated across over 60 countries.

    The latest shareholding data reveals that Kedia Securities held 39 lakh shares, or 4.21 per cent stake, in Tejas Networks as of September 30 against 14 lakh shares, or 1.52 per cent stake, that it held at the end of the preceding quarter.

    Kedia opined that Tejas would benefit from the increased consumption of data as it is one of the highest R&D spenders in India. The R&D spend by the company has been 10-15 per cent of its revenue, which is one the highest in any segment, be it technology or pharma.

    Tejas’ addressable market size is worth more than $7 billion a year, whereas they are not even at $100-150 million revenue mark yet. The company fits into my ‘SMILE’ investing principle,” he said.

    SMILE stands for Small in size, Medium in experience, Large in aspiration and Extra-large in market potential.

    Ramco Systems

    Ramco Systems is also one of Kedia's recent investments.

    He explained the investment rationale in the following words:

    IT products take 5-7 years to stabilise. What Ramco has developed with a few hundreds of crore of rupees would take billions of dollars if developed in the US. No IT company in India, except Ramco, has any products of international standards,” he said.

    He also opined that product companies should be given much more value than services firms. “It seems the time has come and you will find every product company commanding a never-before kind of higher premium,” says he.

    Ramco is an Indian multinational company and Indian's only answer to international giants like Oracle, SAP and Microsoft in the products category,” Kedia said.

    However, he also cautioned that a good part of their business comes from Aviation industry which is in the doldrums this year.

     
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