Amitabh Bachchan, the great thespian and doyen of Bollywood, is the last person one would associate with the rough and tumble of stock markets. One would expect that in keeping with his staid and sober personality, he would prefer to invest in RBI Gilt Bonds or at least in trusted blue chip stocks.
However, Amitabh Bachchan has taken us all by surprise by showing a preference for ultra micro-cap stocks and that too for stocks that are unknown to regular market goers like you and me.
Stampede Capital is a shining example of this. When he bought the stock, we mocked him thinking that he had been duped into buying a junkyard stock. However, when the stock turned into a glittering five-bagger within less than a year, we had to apologize and pay him our tribute.
Amitabh Bachchan’s latest stock pick is Nitin Fire Protection Industries, a small cap with a market capitalisation of Rs. 1,250 crore. Today, he took everyone by surprise when he turned up at the counter. As the punters gaped at him stupefied, he placed an order for 15,00,000 shares in his rich baritone and coolly paid the sum of Rs. 6.45 crore at Rs. 42.99 per share.
Amitabh appears to have timed his purchase perfectly because just a few hours thereafter, Nitin Fire reported blockbuster Q1FY16 results. The consolidated revenue surged to Rs. 337.89 as compared to Rs. 233.84 crore QOQ and Rs. 285.01 YOY. The net profit surged to Rs. 20.77 crore as compared to Rs. 6.82 crore QOQ and Rs. 18.79 crore YOY.
Nitin Fire’s top brass have also been making bullish statements. Rahul Shah, ED, said that the Company is aiming to keep growing at an impressive CAGR of 20-25% over the next several years. He also stated that the Company intends to keep its margins at 15-20% and to penetrate the US market. He also stated Nitin Fire’s target is to become a “billion-dollar company” by 2020.
Nitin Fire also appears to be a sound buy from a technical perspective. According to Rahul Mohinder, an expert in technical analysis, Nitin Fire has “broken out” and has a target price of Rs. 58-60.
If you ponder over it, you will realize that Nitin Fire is a brilliant way to play NAMO’s “100-cities” and “housing for all” theme. It is only a question of time before NAMO gets cracking on these issues and when he does stocks like Nitin Fire, HSIL, Cera, Pokarna etc will take off in an upward trajectory.
Now, the only question is whether Nitin Fire will be able to match the scorching track record set up by Stampede Capital, its sibling in the Big B’s portfolio. While Stampede’s act is a difficult one to replicate, Nitin does have the wherewithal to give a good fight! Wot say?