Neha Majithia and her team mates at Microsec have an impressive track record at finding multi-bagger stocks. In their reports of August 2009 and September 2012, they put the spotlight on stocks like La Opala RG, Cera Sanitaryware, Amara Raja, Dhanuka Agritech, Somany Ceramics, PI Industries, Wimplast, Hawkins Cookers, TTK Prestige, Bata, Greenply etc.
If we had created a portfolio of these stocks, we would be multi-millionaires today.
Neha Majithia recommended a “Strong Buy” of Whirlpool on 28th November 2013. Her logic was simple to understand. She explained that Whirlpool is part of a global MNC, has zero debt, powerful brands, marketing muscle and reasonable valuations. On that date, Whirlpool was quoting at Rs. 171.
By 24th May 2014, Whirlpool had surged to Rs. 304. Neha issued an update, reiterating her “strong buy” advice.
By 25th August 2014, Whirlpool had surged to Rs. 442. However, Neha was not at all perturbed. She coolly looked investors in the eye and once again advised a “strong buy”.
Today, Whirlpool surged nearly 15% to touch Rs. 610.
The return, since Neha’s first buy call: 251%.
The reason for the euphoria is the consistent growth that Whirlpool has been showing in its quarterly results. In Q2FY15, the sales surged to Rs 709.14 crore, up 20.91 per cent from Rs 586.48 crore in the same period last year. The net profit surged to Rs 40.72 crore as compared to Rs 16.54 crore for the same period of the previous fiscal.
What aided the bullish mood is the statement by Arvind Uppal, Chairman, Whirlpool India, that the company plans to achieve the target of growing revenue 2.5 times in next three years, which is a 35% CAGR over FY14-FY17E with focus on profitability. “By 2017, we want to achieve the number one position in home appliances industry in India” he told CNBC-TV18.
Unfortunately, I goofed up big-time in all this. I had a big chunk of Whirlpool stock. I sold that and bought Bajaj Electric in the mistaken impression that the latter offered more “bang for the buck”.
Today, Bajaj Electric reported disastrous Q2FY15 results, sending the stock into a steep dive.
So, not only have I been deprived of the fabulous gains from Whirlpool but I have suffered heavy losses in Bajaj Electricals.
This has made me feel very miserable. Next time, I am not going to second-guess Neha Majithia.