P. N. Vijay can take a bow because a stock that he picked in January 2012 and predicted a 35-40% return has lived up to his predictions.
P. N. Vijay was very bullish on Kajaria Ceramics in January 2012 when it was languishing at Rs. 98. He pointed out that Kajaria Ceramics was one of the top players in the ceramic flooring market in the country along with Rahejas, H&R Johnson and Somany. Kajaria Ceramics has been growing very impressively, its’ got a terrific brand image on the high street and its’ got a strong distribution, he gushed. Kajaria has also recently expanded its capacity by about 20%, P. N. Vijay explained.
On the scope for profit from the stock, P. N. Vijay was very conservative, pegging it at 35-40% in a 12 months period. Well, to everyone’s surprise, Kajaria Ceramics has been quite a rocket stock and touched a 52 week high of Rs. 219 on 17th October, resulting in incredible gains of 120% in just 10 months.
One savvy investor who made a bit of money on Kajaria Cermaics is Ashish Dhawan of ChrysCapital. Ashish Dhawan bought 9,59,047 shares at Rs. 71 each in September 2010 and sold off his entire lot in May 2012 for Rs.158, netting him a cool profit of Rs. 87 per share. However, Ashish Dhawan left a lot of money on the table. If he had waited a bit longer, he could have taken home a profit of Rs. 148 per share.
Anyway, Kajaria Ceramics has attracted a large number of other top quality investors like Morgan Stanley & HSBC Bank. GMO Emerging Markets Fund bought a big chunk of 8,85,485 shares of Kajaria Ceramics in September 2012 at the price of Rs. 179 for a total consideration of Rs. 15.85 crores. GMO Emerging Markets Fund has already made a cool profit of Rs. 3.27 crores on its purchase of Kajaria Ceramics.
Emkay & Dolat Capital also put a buy on Kajaria Ceramics in July 2012 & September 2012 respectively when it was quoting at Rs. 174. It was pointed out that Kajaria Ceramics had a strong leadership position in the ceramic tiles Industry backed by complete range of products, superior design capability, high brand recall and a loyal and strong dealer network. It was also stated that the demand drivers of the tile Industry continue to be robust and that industry growth of 15% CAGR over the next few years was expected. It was emphasized that Chinese imports are no longer a threat except in small pockets, as anti dumping duty and other factors have made them unattractive.
So, given the long-term prospects of Kajaria Ceramics, it may not be too late for latecomers to dip their toes in the stock.