Well a lot of similarities with my portfolio, bought cosmic quite cheap and sold at 2.5x.
Invested in Shri Balaji Valves after visiting their plant in Pune, though the price at that price was quite high and it has fallen 50% from that price.

But the quality of management, the way they have organized their plant and their professionalism speaks volumes and they have a long way to go in future.

The CFO attended us for 10 min. Due to some other engagement which he had, he told his to CA to have a word with us. I have seen most of the companies that plan to go for IPO creating new conference halls and interiors as a way to ‘show off’. But these guys’ facilities were already in place and the office had good ambience. So perhaps they are giving importance to their white collar associates

I have seen a lot of small companies ignoring their office staff convenience and facilities and that becomes the prime reason for employees to switch. A lot of SMEs just even make containers / makeshift arrangement for office staff and accountants.

Talking of their plant, it was neatly organized. Techinicians were wearing helmet / ear plugs and other safety stuff even though a lot of them were unsupervised.

They have some spare land and plan to utilize it soon and they are going to get some Europian certificates soon. How soon, that we have to keep an eye.
Management was quite upbeat on their numbers and didnt disclose much. I observed a slight smile on them. Hoping that the smile gets converted to numbers!!

@visuarchie
Question – Is there a reason why you only look at the 250 Smallcap stocks and not the entire small cap universe?
a genuine multibagger which is a small-cap can be outside the index and will only come into the index after meeting certain criteria which can take long time to meet?

Buildup of Cash: 720 Crs in books!
400 Cr capex in last 3 yrs, without any incremental debt!
Promoter holding went up by 3% in this year!

Hi Manohar
Yes.
The management has always over promised and under delivered. And yes, It’s disappointing to see the management pushing the targets to next year.
My investment thesis:

1. Confirmed orders from Auto OE suppliers, which are of higher margin. The growth and margin growth may lead to operating leverage and my estimation is profit of 200 cr by Fy26 04 FY27.
2. Downside risk: The stock was traind at ~400 rs even in Mar 2023, when most of the stocks took a beating. This combined with anticipated profit growth (Point 1) made this co seem like a opportunity with limited downside risk at the time of purchase. My avg price is ~532 rs
3. Even at current price the stock is trading 20% below it’s market price, which is not too bad compared to the correction that others have seen. And I’ll cap the downside at ~400 which is the price is Mar 2023

The management commentary in Q3 FY24 indicatds the delay in execution of orders and delay in growth. With this my returns would be lower than what I earlier anticipated (2-3 years time frame).

While this is not the best outcome for me, I don’t think it’s a mistake. It’s just that I’ll make a decent CAGR (15-20%) returns while I earlier anticipated a 25-35% CAGR.

Please share your view on this co and what you think of my investment thesis.

And why have you udpating your Portfolio thread. Would be a reader if and when you resume it

Thank you

Praveen