Has Vijay Kedia Joined Dolly Khanna’s Fan Club & Is He Cloning Her Stock Picks?

Vijay Kedia is an ace stock picker in his own right. He is a self-made man and an inspiring story of rags to riches. His portfolio boasts of massive chunks of super-duper multi-bagger stocks like Cera Sanitaryware, Atul Auto etc.

But, can any investor resist the charms of a stock picker like Dolly Khanna whose magic wand has enthralled all of us?

The first evidence that Vijay Kedia was enchanted with Dolly came when we noticed that he had Cera Sanitaryware in his portfolio (Dolly holds 130742 shares while Kedia holds 300,000 shares).

The second instance is Liberty Shoes. Dolly (presently) holds 305,883 shares (she started buying in the September 2013 quarter). Vijay Kedia followed and bought a chunk in the March 2014 quarter (he presently holds 1,75,000 shares).

Yet another instance is Premier Explosives. Dolly bought 1,13,274 shares (present: 1,16,174) in the June 2014 quarter. Kedia bought 100,000 shares in the September 2014 quarter).

The latest instance is that of Manjushree Technopack. Dolly Khanna bought a chunk of 1,38,031 shares in the March 2014 quarter and has increased it to 1,40,686 in the September 2014. Vijay Kedia has joined her with a chunk of 1,50,745 shares in the September quarter.

Of course, all of this may be a coincidence. As they say “great minds think alike“.

Amyway, as devoted fans of Dolly Khanna and Vijay Kedia, it our bounden duty to find out why these ace stock pickers are investing so heavily in Manjushree Technopack.

To understand Manjushree’s business model, we have to a read the research report issued by HDFC Securities. The report points out that Manjushree is the largest packaging facility in South Asia and that it boasts of marquee clients like Coca-Cola, Pesis, United Spirits, Reckitt Benckiser, Bacardi, Diageo, Tata Tea, Mondelēz India (Cadbury Bournvita), GSK Healthcare (Horlicks), Perfetti, P&G etc for various products like liquor, personal care, dairy, edible oils etc. HDFC Securities advices a buy on the basis that Manjushree’s ramp up in capacity, growing exports business, diversification into new segments, rising consumption of PET bottles and water bottles, proximate client location and new added clients means that earnings visibility has improved and the stock will do well.

Though HDFC Sec’s target price of Rs. 154 has come and gone a long time ago, their advice remains intact in principle.

Another resource to understand Manjushree is the more recent (July 2014) report by StockAxis. StockAxis has said the same thing that HDFC Sec has said.

There is also a report by FirstCall Research which points out that the total size of the Indian packaging industry is about $ 25 billion with an annual growth rate of about 13-15% per annum. So, there is no dearth of growth opportunities for Manjushree Technopack.

The one noteworthy aspect is that Dolly Khanna appears to be very bullish about the packaging sector. Apart from Manjushree, she also holds a big chunk of 1,30,780 shares in Mold-Tech Packaging. Probably, she feels that the best way to play the boom in the FMCG sector is through the packaging companies.