Please analyze the data on what has happens to returns in stocks where Mr. Kacholia invests and then retail investors invests after a few days. Mr. Kacholia buys illiquid stocks at discounted rates based on his relationship with promoters. Then the news of his buying spreads which props up the stock. By the time you buy it might be too expensive. Same thing is playing out in Venus Pipes. According to Monarch Capital’s optimistic estimates EPS will jump from Rs17.8 in FY23E to Rs28.6 in FY24E and then 52.2 in FY25E. On FY24E the stock is already at 29.5x FY24E at the current price of Rs845. Do you have margin of safety?
I think the market has changed over the couple of years. It is not easy to make money if you ignore entry price valuations unlike say 3 to 4 years back. We are in a higher interest rate environment which means P/E or P/BV multiples accorded will be lower
But well please take my point of view with a pinch of salt because Venus Pipes might be a mind bogglingly good company with great prospects which might do well!
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